BBVA SA is leaning toward proceeding with its takeover offer for Banco Sabadell SA and is sounding out investors to see if they still back the deal, after Spain said the lenders wouldn’t be allowed to fully merge for several years.

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 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.