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The Spanish government has ordered that BBVA’s €11bn hostile bid for rival lender Sabadell be subjected to a full review by cabinet ministers, the latest setback in a year-long attempt to unite two of the country’s largest banks.
Carlos Cuerpo, Spain’s economy minister, said on Tuesday that he had sent the deal to the cabinet, which will have 30 days to decide whether there are reasons other than competition issues to impose additional conditions or restrictions on it.
The Socialist-led government has previously voiced opposition to the tie-up, which would turn a combined BBVA-Sabadell into the second-biggest player in Spain’s loan market, leapfrogging Santander but falling short of CaixaBank.
Since its launch in May 2024, the hostile bid has become Spain’s most ill-tempered takeover saga in years. It is opposed by Sabadell’s board — which initially rejected a friendly approach by BBVA — as well as the business elite in Catalonia, where Sabadell has roots.
Cuerpo’s announcement came after Spain’s competition regulator, the CNMC, said earlier this month it had authorised the takeover subject to several non-controversial remedies, including a commitment to maintain branches that BBVA had already made.
Cuerpo said his ministry’s analysis of the deal had made clear it was necessary to look more closely at its potential impact on “job protection, financial inclusion and territorial cohesion”, a reference to Sabadell’s weight in the regional economies of Catalonia and Valencia.
A government statement also highlighted the deal’s potential impact on “research and technological development, and social policy objectives”.
Cuerpo said his decision to send the deal to the cabinet was backed by five other ministries with a stake in economic policy.
He has previously raised concerns that the deal would create financial stability risks by leaving the country with just three large banks, but the competition regulator’s ruling largely removed them from consideration.
Writing in the Financial Times, César González-Bueno, Sabadell’s chief executive, has said the “unprecedented opposition in Spain” against the deal was “rooted in a desire to protect competition and stimulate growth”, arguing that a merger would hurt local businesses.
BBVA, led by chair Carlos Torres, had initially wanted to launch its tender offer before the end of last year to Sabadell shareholders, who will decide whether the acquisition goes ahead.
Now BBVA will need to wait for the completion of the cabinet review, followed by the market regulator’s approval, before it can launch the tender.
If Sabadell shareholders then accept the takeover bid, the Spanish government can do nothing to stop it. But the government has the power to veto a legal merger of the two banks, raising the possibility that BBVA could end up owning Sabadell but be unable to integrate it.
BBVA and Sabadell did not immediately respond to requests for comment.
