The Spanish Economy and Labour ministers said on Thursday that they opposed the hostile takeover bid launched by BBVA bank for its smaller rival Banco Sabadell, saying that the government would have the final say in the operation.
The country’s second-largest bank announced on Thursday a hostile takeover bid for smaller rival Sabadell but the government vowed to block the move, which would create a European giant in the sector.
BBVA’s new bid came three days after Sabadell’s board of directors rejected a merger proposal, saying it was ‘not in the best interest’ of the bank. ALSO READ: Banco Sabadell rejects merger offer from BBVA.
The takeover proposal values Sabadell, Spain’s fourth-largest banking group in terms of capitalisation, at nearly €11.5 billion.
‘The operation will create one of the best banks in Europe,’ BBVA said in a statement.
But Prime Minister Pedro Sánchez’s coalition government swiftly came out against the move, as did the regional government of Catalonia where Sabadell was born and where it has a strong presence.
Labour Minister Yolanda Díaz said it was against Spain’s ‘interests’ because it ‘would destroy many jobs’.
Economy Minister Carlos Cuerpo warned the government ‘will have the last word when it comes to authorising the operation’ which he said would be ‘potentially damaging’.
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