Challenges Ahead for BBVA's Takeover of Sabadell
Spain's government has approved BBVA's takeover of Sabadell under conditions requiring the banks to remain separate for three years and maintain employment levels, potentially complicating BBVA's strategy. The deal, worth 14 billion euros, awaits further approval and could face withdrawal if conditions are deemed too difficult.
In a significant development, Spain's government has mandated BBVA to operate separately from Sabadell for at least three years while preserving current employment levels as part of its takeover bid. The decision throws a wrench in BBVA's plans and contrasts with the antitrust approval previously granted.
Economy Minister Carlos Cuerpo confirmed that while BBVA can acquire Sabadell's shares, the final say on the merger lies with the government. The stringent conditions include maintaining operational autonomy for financing and decisions related to staff, branch networks, and services.
BBVA's Chairman Carlos Torres hinted at possibly retracting the offer if the conditions prove too stringent, especially regarding the potential sale of Sabadell's British unit, TSB. Discussions are in progress as BBVA evaluates the implications of the government's stipulations.
(With inputs from agencies.)
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