BBVA-Sabadell Merger Faces Government Hurdles

The proposed merger between BBVA and Sabadell is encountering complications stemming from government conditions. This strategic move, designed to consolidate banking capital in Spain, faces potential delays and alternative scenarios as decisions loom.

Government Intervention Weighs on BBVA’s Plans

BBVA is assessing the implications of government-imposed conditions on its potential acquisition of Sabadell. The bank is considering whether to proceed with the deal, potentially withdrawing its offer due to these regulatory demands. These conditions are being carefully evaluated by BBVA.

“The Ayuso government advances to Feijóo and qualifies as “toll to independence” the government’s conditions to the BBVA to Sabadell.”

—The newspaper

The Spanish government’s stance is influencing the merger’s trajectory, as it contemplates the possible implications. According to a recent study, mergers in the financial sector have a significant impact on market concentration, with the top five banks controlling over 80% of assets (Bank for International Settlements, 2024).

Decision Timeline and Potential Alternatives

BBVA is under pressure to decide promptly to avoid any delays to the eventual merger. The bank is also considering alternative strategies. These options may include adjustments to the terms of the original offer or even abandoning the deal altogether.

The government’s decision is expected to be announced in the coming days.