Spanish lenders Banco Sabadell and BBVA have terminated their merger negotiations as they could not reach an agreement over price.

The all-share deal, which was first announced last week, fell apart as there was disagreement over the price BBVA would pay for its smaller rival.

According to media reports, apart from the price, power struggle at the new BBVA-Sabadell entity was also a concern.

At the outset, Sabadell’s head Josep Oliu was considered for the co-chairman position at the merged entity – besides BBVA’s Carlos Torres – but with less powers.

Subsequently, Oliu agreed to not hold any position in the new group if the purchase was made in cash, rather than through an exchange of shares.

BBVA agreed to Sabadell’s terms, however, it was not willing to increase its potential bid and as a result, the merger fell apart.

Initially, BBVA made an offer of nearly €2.5bn ($3bn), but Sabadell demanded more after its share value had increased recently.

The new BBVA-Sabadell entity could have nearly €600bn ($710bn) in assets and a market value of €26.7bn in Spain.

Internationally, the combined company could have €860bn in total assets.

A successful synergy could result in the combined group having a total of 4,225 offices in Spain and 45,866 employees.

Sabadell’s next plan

According to the El Economista newspaper, Banco Sabadell will now operate independently, while looking to establish a new business plan, focusing on the domestic market.

Banco Sabadell could exit the UK market by scrapping its British banking arm TSB.

Sabadell said that it will unveil the new business plan during the first quarter of 2021.

Recent deals

Earlier this month, PNC Financial Services Group inked a definitive agreement to buy the US banking business of BBVA.

Under the agreement, PNC said it will pay $11.6bn in cash for the acquisition of BBVA USA Bancshares, including its US banking subsidiary BBVA USA.