The Spanish government will examine BBVA's (BBVA.MC) , opens new tab hostile takeover offer for Sabadell (SABE.MC) , opens new tab, the economy minister said on Tuesday, a rare step that could mean the bank must agree to more conditions before its bid is approved.
Madrid has so far opposed the transaction, valued at over 14 billion euros, because of the risk it could lead to job losses.
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After Economy Minister Carlos Cuerpo's decision to put the deal to the cabinet, the government now has until the end of June to decide on whether to approve it with or without conditions on grounds of common interest, extending a process that began more than a year ago with BBVA's hostile offer.
A Sabadell spokesperson said that the bank was "fully convinced" of its stand-alone strategy.
Euro zone banking supervisors have long wanted to see more banking consolidation to strengthen lenders, but the prospect of deals has been hampered by various factors, including politicians' preference to protect jobs, and in the case of cross-border deals, for home-grown champions.
The Spanish government also recently started a non-binding public consultation to gather the views of citizens and businesses, an unprecedented move for such transactions.
"The public consultation (...) points to the existence of reasons of general interest that may be affected by the deal," Cuerpo said, adding that five ministries requested that the transaction be referred to the cabinet.
Some observers said the government's consultation was a further sign of political opposition to the deal.
