Spanish financial services provider BBVA has again reached out to its rival Sabadell regarding a potential $10bn merger, four years after previous merger talks between the two parties failed.

The proposed merger would create a combined Spanish bank with assets of nearly €1 trillion and a market value close to their rival Santander.

BBVA had appointed advisers and informed Sabadell’s board chairman about their interest in initiating negotiations over a potential merger.

Sabadell, in a statement, confirmed the receipt of an indicative written proposal from BBVA and said that its board will thoroughly analyse all aspects of the proposal.

According to Reuters’ report, the potential merger follows a period of consolidation in Spain’s banking sector as the banks are looking to reduce costs and boost scale.

Currently, Spain has only 10 operating banks, which reduced from 55 before the 2008 financial crisis, said the publication.

In November 2020, Sabadell and BBVA terminated their merger talks, due to disagreements over the transaction consideration offered by BBVA.

Sabadell, in a filing to the National Securities Market Commission (CNMV), stated that the companies failed to reach an agreement on the exchange ratio of their shares.

BBVA was not willing to pay more than €2.5bn for Sabadell, which was not willing to accept less than €3bn, and the two companies also differed over the value of TSB.

UK-based TSB Banking Group was acquired by Sabadell in 2015 for £1.7bn ($2.29bn).

Spanish newspaper El Economista reported that the disagreement was not only about the price but also about power distribution in the enlarged group, after the merger.

According to Reuters’ report, Sabadell is currently €9.7bn ($10.36bn), while BBVA has a market value of €59.4bn, competing with Santander’s more than €72bn.