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The Spanish government has thrown a new obstacle into the path of BBVA’s €11bn hostile bid for rival lender Sabadell, declaring that the would-be acquirer cannot merge the two entities for at least three years.
Spain’s economy minister Carlos Cuerpo said that after a 30-day review the cabinet had decided that the two entities would have to “maintain separate legal identities and assets, as well as autonomy in the management of their activities” for three years and possibly more.
The decision means BBVA must now decide whether to accept the conditions, challenge them in the courts, or drop its bid entirely. Carlos Torres, the BBVA chair masterminding the bid, said on Monday that it would be “illegal” for the government to impose extra conditions.
BBVA had been preparing to launch its formal tender offer to Sabadell shareholders in the coming weeks. The Spanish government’s prohibition on a full merger would come into force if BBVA’s takeover bid were successful.
