Spain’s Curbs on BBVA’s Sabadell Bid Spark EU Backlash (1)

European Union watchdogs have fired off a legal warning to the Spanish government for hindering BBVA SA’s €13 billion ($15.1 billion) bid for rival Banco Sabadell SA.

The European Commission alleges that a series of onerous conditions imposed on the deal violate EU single market rules that allow freedom of movement of capital in the bloc unless there are exceptional circumstances.

“It is highly questionable whether the requirement that the two banks maintain separate legal personality and management for a period of three years addresses legitimate public order or security objectives that are not already sufficiently protected by other ...