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Santander to Buy Sabadell’s TSB Unit for £2.65bn in Cash
July 2, 2025
Banco Santander agreed to buy Sabadell’s UK unit TSB for £2.65bn ($3.6bn) in an all-cash deal. TSB had attracted early buyout interest from Barclays and Santander earlier in June. The deal will ultimately see the combined entity serve nearly 28mn customers in the UK and make it among the largest lender there, going by current account balances. It will also add another 218 branches to Santander’s existing network of 349 UK branches, besides adding £35bn ($48bn) in deposits to the current £183bn ($252bn) in their books.
The transaction is still subject to approvals by Sabadell’s shareholders and regulators. Upon closing the deal, Sabadell said that it will pay an extraordinary dividend of ~€2.6bn ($3.1bn) likely in 1Q2026. The deal supports Sabadell’s defense against a hostile takeover attempt by BBVA. The synergies arising from Santander’s existing UK operations with the addition of TSB is expected to lead to cost savings of ~£400mn ($550mn). Sabadell originally acquired TSB in 2015 for £1.7bn ($2.3bn), but has since faced setbacks due to a failed IT upgrade before recent improvements in performance.
Banco Santander’s dollar bonds were trading stable across the curve
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