The Spanish government said it would clear Banco Bilbao Vizcaya Argentaria’s hostile bid for smaller peer Banco de Sabadell on the condition that the banks don’t legally merge for up to five years.Spain’s Ministry of Economy,

Spain's BBVA will not be allowed to integrate its operations with Sabadell for at least three years as one of the conditions imposed by the Spanish government on its hostile bid for its smaller rival in a potential blow to the suitor's expansion plans.

Spain's government has approved BBVA's takeover of Sabadell under conditions requiring the banks to remain separate for three years and maintain employment levels, potentially complicating BBVA's strategy.