Madrid (Reuters) – The Spanish government has set new conditions for its approval of the hostile public purchasing offer of BBVA on its competitor Sabadell, and claims in particular that the two companies remain separate legal entities over the next three years, Minister of Economy Cuerpo said on Tuesday.

These conditions differ from the criteria used by the Spanish competition gendarme when he has authorized the operation, currently estimated at around 14 billion euros and subject to several corrective measures.

“The government has authorized the operation between BBVA and Sabadell provided that, for the next three years, they remain distinct legal entities and retain separate assets, as well as autonomy in the management of their activities,” said Carlos Cuerpo at a press conference.

He said that the new entity would be entitled to request the merger once the condition set on Tuesday is met.

Under Spanish legislation, the government cannot prevent BBVA from buying Sabadell actions, but it has the last word at a later stage on the pursuit or not of the merger.

BBVA president Carlos Torres said on Monday that the group could withdraw its offer if the conditions imposed were too strict or if it was forced to accept the sale of the British subsidiary of Sabadell, TSB.

BBVA made no immediate comments on the conditions.

Carlos Cuerpo added that the conditions involved autonomous decision -making in the financing of small and medium -sized enterprises, decisions relating to human resources or employment protection, the network of agencies and banking services, as well as social protection through the Sabadell foundations.

Madrid had so far opposed the transaction due to the risk of job losses it could cause.

(Written by Jesús Aguado, Emma Pinedo and Inti Landauro; Mara Vîlcu for the ; edited by Augustin Turpin)

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