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Investing.com -- Banco Bilbao (NYSE:BBVA) Vizcaya Argentaria (BME:BBVA) is reevaluating the financial benefits of its proposed acquisition of Banco Sabadell (BME:SABK) following conditions imposed by the Spanish government and Sabadell shareholders’ approval to sell its UK operations.
BBVA (BME:BBVA)’s pursuit of its smaller competitor, which has lasted for a year, has encountered resistance from Sabadell’s management team and Spanish authorities.
In June, the government stated it would approve the deal only if the entities and assets of both banks remain separate and operate independently for at least three years.
Despite these challenges, BBVA maintains that the transaction would create value for shareholders of both banks, though it acknowledged on Thursday that Madrid’s conditions would delay the implementation of merger synergies.
In a document filed with the stock market regulator, BBVA outlined potential risks that could arise once the government’s conditions expire and full merger implementation becomes possible.
The bank warned that "the operational integration could be particularly difficult and complex, could substantially divert management’s time, attention, and resources, and could entail greater costs and require more time and resources than anticipated."
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