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Spain Weighs Additional Conditions on BBVA’s Hostile Bid for Sabadell

By  |  June 19, 2025
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The Spanish government is poised to decide next week whether to impose further conditions on BBVA’s €14 billion ($16 billion) hostile takeover attempt of smaller rival Sabadell, which has a market value of around €23 billion, according to Reuters. This high-stakes move comes as Madrid maintains reservations over the deal, citing concerns about potential job losses and broader national interests.

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    Per Reuters, the government has until June 26 to complete its review and is expected to discuss the matter during a cabinet meeting on June 24. Unlike the competition-focused scrutiny typically undertaken by the Spanish regulator, the government’s review involves a broader “common interest” criterion. Economy Minister Carlos Cuerpo has highlighted priorities such as financial inclusion and territorial cohesion as key factors influencing the decision.

    Since the announcement of the bid in April last year, Madrid has expressed opposition to the merger, marking a rare instance of ministerial intervention that drew criticism from the European Union. Per Reuters, the EU has urged Spain to respect the competition regulator’s decision, but the government retains the legal right to impose conditions on the grounds of national defense, public safety, or environmental protection.

    The ambiguity of the “common interest” clause leaves open the possibility that the government could substantially alter the course of the acquisition. Financial advisory firm MKP Advisors notes that the law’s vagueness could enable Madrid to effectively derail the deal, although it cannot outright prevent BBVA from purchasing Sabadell shares.

    Related: EU Backs Bank Mergers, Criticizes Spanish Scrutiny of BBVA Bid

    BBVA Chairman Carlos Torres has downplayed the government’s leverage, stating that Madrid can only uphold or even “soften” the conditions set by the competition authority. In a recent radio interview, Torres also indicated that BBVA could challenge any adverse government ruling in court or comply initially and appeal afterward. In contrast, Sabadell’s CEO César González-Bueno believes that stricter conditions can be imposed under the common interest rationale, per Reuters.

    Amid this regulatory tug-of-war, Sabadell is taking steps to defend its independence. The bank has announced increased dividend payouts for 2024 and 2025, designed to secure shareholder loyalty. Additionally, Sabadell revealed it had received expressions of interest for its British subsidiary, TSB, a move analysts interpret as a defensive strategy against BBVA’s hostile bid.

    According to RBC analysts, selling TSB could be an attempt to diminish Sabadell’s attractiveness as a takeover target. BBVA’s Torres acknowledged that the valuation of TSB was already factored into BBVA’s offer. RBC analyst Pablo de la Torre Cuevas noted that BBVA might adjust its bid depending on the outcome of any potential TSB sale.

    However, divesting TSB may prove complicated. Spanish law requires that boards of target companies maintain a passive stance during takeover attempts and obtain shareholder approval before any actions that could block an acquisition, per Reuters.

    Source: Reuters