Spain’s Sabadell agrees to sell British bank TSB for €3.1bn – and dish out billions to shareholders

SPAIN’S Banco Sabadell has agreed to sell British high street bank TSB to rival Santander for €3.1 billion, in a move that could reshape the Spanish banking landscape.

The sale comes as Sabadell fights off a hostile takeover bid from BBVA Bank, with the TSB windfall potentially strengthening its hand against the unwanted suitor.

The bank plans to hand out €2.5 billion of the proceeds as a sweetener for shareholders being tempted by rival BBVA to give in to a hostile takeover.

READ MORE: Sabadell looks to sell off British bank TSB to fend off hostile takeover by Spain’s BBVA

Sabadell’s chief executive César González-Bueno insisted the TSB sale isn’t a ‘poison pill’ defence mechanism but a strategic move to unlock value. 

However, the €3.1 billion injection certainly strengthens Sabadell’s hand as it prepares for a crucial shareholder vote on BBVA’s offer.

Santander, led by executive chairman Ana Botín, beat off competition from Barclays to secure TSB, which serves millions of British customers across the country. 

The deal will create Britain’s third-largest bank when completed in early 2026.

READ MORE: Sabadell Bank in Spain boosts profits thanks to TSB subsidiary plus massive job cuts and branch closures

For British TSB customers, the acquisition means their accounts will eventually be integrated into Santander UK’s operations, though both banks have promised a smooth transition with no immediate changes to services.

Sabadell originally bought TSB from Lloyds in 2015 for €2.3 billion, making Tuesday’s agreement a healthy profit for the Catalan lender. 

BBVA has been pursuing Sabadell for over a year in what would create Spain’s second-largest bank, but the target has resisted fiercely. 

The Spanish government has also thrown up roadblocks, recently imposing conditions that would delay any merger for three years and ban job cuts or branch closures.

READ MORE: Spain’s government approves BBVA takeover of Sabadell Bank but with massive strings attached

The deal requires approval from UK banking regulators and competition authorities, as well as the European Central Bank. 

Both sides are confident of completing the transaction by the first quarter of 2026.

For Santander, taking over TSB will give it a much bigger slice of the UK banking market, with the Spanish giant expecting to save £400 million a year by combining operations and make a hefty 20% profit on its investment.

BBVA now faces the challenge of convincing Sabadell shareholders that their offer remains attractive despite their target’s strengthened financial position.

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