The Spanish government said it would approve BBVA’s hostile takeover of Banco de Sabadell on condition that the banks temporarily be managed independently and kept legally separate.

Spain's BBVA will decide shortly whether to move ahead with its hostile bid for Sabadell after reassessing cost savings in light of conditions imposed by the Spanish government, the bank's manager for Spain said on Wednesday.

The Spanish banking behemoth BBVA is considering its €14 billion hostile takeover of smaller rival Sabadell, following the Spanish government’s imposition of a five-year moratorium on combining the two banks’ operations, which casts doubt on the viability of projected cost savings.