(Reuters) – The Spanish government opposes a hostile takeover bid launched on Thursday by BBVA for its rival Sabadell, Economy Minister Carlos Cuerpo said.
In accordance with Spanish law, any banking merger or acquisition is subject to final approval from the Ministry of Economy. The government has six months to make a decision after consulting regulatory authorities, including the Bank of Spain and the Financial Markets Regulatory Authority (CNMV).
BBVA, Spain’s second-largest bank, presented a 12.23 billion euro buyout offer directly to Sabadell shareholders on Thursday, after the target bank’s board rejected a similar proposal earlier this week.
According to Carlos Cuerpo, the government considers that the combination of the two banks would have potentially harmful effects on the Spanish financial system while affecting employment and the customers of Sabadell and BBVA.
BBVA Chairman Carlos Torres said on Thursday the combined entity would boost the Spanish economy by generating a higher tax base and creating a stronger player in Europe.
“I am convinced that the government will appreciate the value of the transaction,” said the former CEO of the group during a meeting with investors.
In Catalonia, the region of Spain that would be most affected by the takeover, unions and some local parties have already expressed concern about the impact a merger would have in terms of job losses and branch closures.
(Reporting Emma Pinedo and Joan Faus; written by Charlie Devereux; French version Alban Kacher, edited by Tangi Salaün)
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