Spain’s competition watchdog has given conditional approval to BBVA’s bid for Banco Sabadell, according to a report citing a person familiar with the decision. The formal announcement could come as early as today, clearing a key hurdle in one of Europe’s largest banking tie-ups of the year.
The move signals that the merger can proceed if BBVA accepts remedies set by the regulator. The terms are expected to be manageable for the buyer, the report said. The decision matters for millions of retail and small-business customers, and for rivals that compete with both banks in Spain and the UK.
What the Conditional Approval Means
Conditional clearance usually involves commitments to ease competition concerns. These can include branch divestments in regions with high market share, limits on customer fee increases, or safeguards for small businesses that rely on credit lines.
“Spain’s antitrust agency approved with conditions BBVA’s bid to acquire Banco Sabadell,” Bloomberg’s Jorge Zuloaga reported, citing a person familiar with the matter.
“The approval is set to be officially announced as early as today… The terms are expected to be feasible for BBVA,” the person said.
Investors will watch the final list of remedies. If they are limited to certain provinces or product lines, integration could stay on track. Extensive asset sales or strict pricing rules would be harder to absorb.
Background on the Bid
BBVA has pursued Sabadell as part of a push to scale up in retail and small-business banking. The two lenders held talks in 2020 that ended without a deal. In 2024, BBVA returned with an all-share offer after Sabadell’s board rejected earlier terms, and then took the proposal directly to shareholders.
Madrid has seen a long run of bank tie-ups since the eurozone crisis. CaixaBank’s merger with Bankia and Unicaja’s deal with Liberbank reduced the number of mid-sized players. Regulators have generally accepted consolidation while insisting on measures to protect competition, especially in regions with few rival branches.
Sabadell also owns TSB in the UK, adding a cross-border layer to the transaction. That unit’s performance and any regulatory views in London could shape integration plans, though Spain’s review focuses on domestic overlaps.
Competition and Consumer Impact
Consumer groups worry that mergers can lead to branch closures, fewer choices, and higher fees. Small firms in industrial regions like Catalonia and Valencia depend on relationship banking and quick decisions on credit.
Analysts note that overlaps are likely strongest in Catalonia, Valencia, and parts of the Mediterranean coast. The watchdog could require BBVA to sell branches or portfolios there, or to commit to service levels for small enterprises.
- Possible remedies: targeted divestitures, fee caps for a period, credit safeguards for SMEs.
- Risks: reduced branch access in rural areas; integration disruptions for clients.
- Opportunities: stronger digital tools, broader product range, and potential cost savings.
Shares of both banks could react to the scope of conditions. Feasible terms would support BBVA’s case that the deal boosts earnings without heavy execution risks.
What Happens Next
The official decision will detail the remedies and the timetable. BBVA would then seek shareholder support, finalize regulatory sign-offs, and begin integration planning. Labor talks on branch networks and staffing could follow. Spanish authorities often push for gradual changes to avoid service gaps.
The European Central Bank typically reviews bank mergers for prudential risks, including capital strength and operational plans. That process runs in parallel with national competition reviews. Any required sales or commitments would be factored into the closing schedule.
Why It Matters for Spain’s Banking Sector
A combined BBVA-Sabadell would be a stronger competitor at home and abroad. Scale can lower costs and fund technology upgrades in payments, mobile banking, and risk management. But size also raises concerns about market power in regions where alternatives are scarce.
For customers, the near-term focus will be on continuity. Clear timelines for product changes, branch transitions, and digital platform moves can reduce confusion. For workers, the key issues are redeployment and negotiated reductions rather than abrupt cuts.
Spain’s likely green light, with conditions, points to a deal that can move forward while guarding competition in key markets. Investors will look for a measured list of remedies that keeps the merger’s logic intact. The next milestones are the formal announcement, details on commitments, and the response from shareholders. Watch for how regional divestitures are structured and how both banks plan to shield small-business clients during the transition.
