Banco Sabadell SA’s sale of its UK unit will further complicate the unsolicited takeover approach by BBVA SA for its smaller Spanish rival, analysts said.

Spain's BBVA will not be allowed to integrate its operations with Sabadell for at least three years as one of the conditions imposed by the Spanish government on its hostile bid for its smaller rival in a potential blow to the suitor's expansion plans.

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.