Sabadell sells TSB to Santander in the middle of BBVA’s bid

Banco Sabadell and Banco Santander announced on 1 July 2025 an agreement under which Santander buys TSB, the British bank Sabadell had acquired in 2015, for £2.65 billion, about €3.1 billion. The price was equivalent to 1.5 times its book value. With the deal, Santander becomes one of the largest retail banks in the United Kingdom.

What we know

Sabadell proposed distributing much of the proceeds to shareholders through a special dividend of €0.50 a share, around €2.5 billion, and raised its forecast for total shareholder returns. Shareholders approved the sale and the dividend in August with more than 99% support. The deal required approval from British regulators.

TSB had for years been a source of problems for Sabadell, especially after the 2018 IT failure that left millions of customers without service, although it had returned to profit in recent years.

The battle with BBVA

The sale came in the middle of BBVA’s hostile takeover bid for Sabadell, launched in May 2024. By selling TSB and paying out a large dividend, Sabadell became smaller and made the deal less attractive for BBVA, which had to recalculate its offer. The government had authorised the bid in June with conditions barring a merger of the two banks for three years. In October the offer failed to reach the minimum acceptance level.

What it means for shareholders

For Sabadell shareholders, the deal meant a large cash payout and a bank more focused on Spain. For Santander shareholders, more weight in the United Kingdom, one of its main markets. Anyone holding Spanish bank shares should follow how dividend policies and each bank’s profile change. Ask your adviser before making decisions.

In big banking battles, selling at the right time is also a form of defence.