Spain’s decision to delay a possible merger of BBVA SA with Banco Sabadell SA is leaving analysts divided over whether the deal will still go ahead.

Spain's BBVA is considering whether to go ahead with its bid for Sabadell after conditions imposed by the Spanish government on the deal and will reassess the impact on its estimated cost savings, the bank's country 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.