Spain’s Council of Ministers has conditionally approved BBVA’s acquisition of Banco Sabadell, requiring both banks to maintain separate legal identities and operational independence for a minimum of three years. The government’s authorization, announced on Tuesday, adds a political and regulatory layer to the deal beyond standard antitrust clearance, signaling a strong focus on safeguarding financial stability and public policy objectives.
The transaction had previously been reviewed by Spain’s antitrust authority, the CNMC, which established a series of commitments. However, the government’s approval introduces a structural condition obliging BBVA and Sabadell to remain distinct entities in terms of governance, decision-making, and balance sheets during the transition period.
According to Economy Minister Carlos Cuerpo, the condition is designed to protect national interest objectives that extend beyond competition policy. These include ensuring credit access for SMEs, preserving employment, maintaining regional banking coverage, supporting financial inclusion and social housing, and fostering innovation through research and development.
“The goal is not to micromanage the merger, but to ensure an orderly process that protects the public interest during a period of significant change in the Spanish banking sector,” Cuerpo said in a press briefing. He emphasized that the legal framework allows for intervention where broader economic or social concerns are at stake.
The autonomy requirement applies to key functions such as credit policy, human resources, branch networks, and the foundations managing each bank’s social programs. The government’s approach avoids imposing piecemeal remedies, opting instead for a unified, time-bound condition to preserve the strategic value of both institutions during the transition.
To monitor compliance, both BBVA and Sabadell must submit a status report and a five-year structural plan to the Ministry of Economy between two and six months before the end of the three-year period. These documents will assess the extent of managerial independence and the projected impact of corporate strategy on public interest goals. The structural plan must also be published online.
Following this evaluation, the Council of Ministers reserves the right to extend the condition for an additional two years if deemed necessary.
The government’s decision comes amid growing political scrutiny of bank consolidation in Europe, where concerns over employment, regional inequality, and financial exclusion are shaping national responses to cross-border and domestic mergers. While the deal can now proceed, the conditions imposed represent a clear signal that systemic relevance and social impact are integral to the regulatory calculus in Spain’s banking sector.
