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 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.