Spain's stock market supervisor said Tuesday it had admitted BBVA's request to authorize its 12.28 billion-euro ($13.19 billion) hostile takeover bid for Sabadell, a potential merger opposed by the country's government.

The admission of the request is part of the regulatory process of approval of operations carried out by the National Securities Market Commission (CNMV).

The admission of the application for processing does not imply any kind of pronouncement on the decision regarding the authorization of the takeover bid, the supervisor reminded in a statement.

The transaction also requires the approval of the European Central Bank and the CNMC.

Last month, Sabadell rejected a share swap takeover bid proposed by BBVA, prompting Spain's second-largest bank to turn hostile in its new attempt to buy the country's fourth-largest lender, following a failed attempt in 2020.

The combined group would overtake Caixabank as the largest bank by assets in Spain, in a deal that would be a further step in the consolidation of the country's banking sector.

BBVA will try to convince regulators of the benefits of the deal, which, according to the bank, could take six to eight months, before formally presenting it to shareholders.

Under Spanish law, the Spanish government cannot stop a takeover process, but it has the final say in authorizing a merger.

BBVA expects the transaction to be completed by mid-2025.

(1 U.S. dollar = 0.9308 euros)

(Reporting by Jesús Aguado; editing by Inti Landauro and Shinjini Ganguli; Spanish editing by Mireia Merino)