BBVA Challenges Spain’s Three-Year Hold on Sabadell Merger in Supreme Court

BBVA has filed an appeal with Spain’s Supreme Court contesting conditions set by the Spanish Government for its €15 billion hostile bid for Banco Sabadell. The bank said the legal step, lodged on 15 July, does not alter the timetable of the takeover, which was first announced more than 15 months ago. Madrid approved the acquisition in June on the proviso that BBVA and Sabadell remain separate for at least three years, a period that could be extended to five. BBVA argues the restriction would postpone the realisation of an estimated €850 million in annual cost synergies and delay the creation of what would become Spain’s second-largest lender by loans, behind CaixaBank. The European Commission has opened an infringement procedure against Spain, saying the government’s powers to intervene in mergers may conflict with EU supervisory rules. Spain has one month left to respond. BBVA maintains that completing the deal will still deliver value to shareholders of both banks despite the regulatory and legal challenges.