Spain’s BBVA will be required to maintain Banco Sabadell and itself as separate entities for at least three years and safeguard existing jobs, according to conditions set by the Spanish government on BBVA’s hostile takeover bid – a move that could hinder its integration plans.
These stipulations differ from those applied by Spain’s competition authority, which had already given the green light to the €14 billion deal, albeit subject to regulatory approvals. ALSO READ: Spain’s competition watchdog clears BBVA-Sabadell takeover, now subject to other approvals.
‘The government has authorised the BBVA and Sabadell deal on the condition that, for the next three years, they remain separate legal entities and maintain separate assets, as well as preserve autonomy in the management of their activities,’ Economy Minister Carlos Cuerpo said at a news briefing following a Tuesday cabinet meeting.
Cuerpo added that after fulfilling the three-year requirement, the combined group could then seek approval to formally merge.
While Spanish legislation does not allow the government to block BBVA from acquiring shares in Sabadell, it does reserve the right to approve or deny the actual merger at a subsequent stage.
BBVA’s chairman Carlos Torres warned on Monday that the bank might pull its offer for Sabadell if the imposed terms proved too restrictive, or if it were compelled to divest Sabadell’s British subsidiary, TSB.
The competition authority’s review did not mark the final step, as it still required government confirmation.
Cuerpo explained that the terms also require that Sabadell retain independent decision-making capacity in key areas – such as financing for small and medium-sized enterprises, staffing decisions, branch operations and services, and the work of Sabadell’s charitable foundations.
Until now, the Spanish government had resisted the takeover, citing concerns that it could result in job cuts. ALSO READ: Spanish government seeks to block BBVA’s hostile bid for rival Sabadell.
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El Gobierno autoriza la OPA de BBVA a Sabadell “con la condición de que durante los tres próximos años ambas entidades mantengan personalidad jurídica y patrimonio separados así como autonomía en la gestión de su actividad” https://t.co/bjVC8vo0IH pic.twitter.com/6m8GYVYjc7
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