BBVA’s Sabadell Bid in Doubt After Spain Delays Merger

BBVA SA‘s €14 billion ($16 billion) bid for rival Banco Sabadell SA suffered a major setback after the Spanish government said the two lenders wouldn’t be allowed to integrate their operations for several years.

The government in Madrid said BBVA can go ahead with its offer under the condition that the two banks keep separate operations for at least three years and possibly as long as five, Economy Minister Carlos Cuerpo said Tuesday. A decision on a legal merger would only come afterwards, he said.