Spanish Government Imposes New Conditions on BBVA’s €14 Billion Bid for Banco Sabadell Amid TSB Sale and €300 Million Synergy Cut

The Spanish government has imposed additional conditions on BBVA's planned €14 billion ($16 billion) takeover bid for Banco Sabadell, marking another regulatory hurdle more than a year after the deal was first proposed. BBVA has adjusted its internal estimates, now expecting synergies from the takeover to be around €300 million, down from earlier projections. The bid documentation has been updated to reflect the effects of Sabadell's sale of its British subsidiary TSB and the associated dividend. The sale of TSB has drawn attention from credit rating agency Scope Ratings, which noted that it reduces Sabadell's business to a solely domestic focus and described the timing of the exit from the UK market as "questionable." Scope also highlighted that the TSB sale adds complexity to the valuation of Sabadell in the context of BBVA's takeover bid. Meanwhile, the Bank of Spain has initiated procedures to raise the countercyclical capital buffer to 1%, a separate regulatory development in the banking sector.