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Investing.com -- The Spanish government has decided to further extend its review of the hostile bid by Banco Bilbao (NYSE:BBVA) Vizcaya Argentaria (BBVA (BME:BBVA)) for its smaller rival, Banco de Sabadell. This decision extends the ongoing takeover battle that began in early May last year when BBVA first targeted the Catalan lender Sabadell.
The Ministry of Economy, Commerce and Business in Spain stated late Tuesday that the offer would be examined by the cabinet on grounds of general interest, beyond just competition. This includes the potential impact of the deal on the banking sector, territorial cohesion, and social policy, among other considerations.
In response to this decision, a spokesperson for Sabadell stated that there is considerable interest from various organizations in the potential consequences of this transaction. Despite this, the bank remains committed to its own plans. BBVA confirmed that it had been informed of this decision by the government.
BBVA’s hostile bid for Sabadell began after it faced resistance from the smaller lender’s management, which led to political backlash. Both government officials and union leaders expressed concerns that the proposed deal could negatively affect competition, employment, and financial inclusion.
This decision by the Economy Ministry comes after a 15-day period following the conditional approval of the takeover by Spain’s competition watchdog, the CNMC. The CNMC had moved the deal into an extended review in November and had approved a series of remedies proposed by BBVA.
The Spanish cabinet now has a 30-day deadline to issue its opinion on the deal, according to the ministry.
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