Banco Santander has reached an agreement to acquire 100% of the capital of the British subsidiary of SabadellTSB, with an assessment of 2,650 million pounds, about 3,100 euros in cash, as reported by the Cantabrian entity through a statement on Tuesday. The Catalan entity estimates that at the end of the operation, planned for the first quarter of 2026, the purchase could be raised to 2.9 billion pounds (3,400 million euros). The Bank chaired by Ana Botín is the fourth mortgage bank of the United Kingdom and will become the eleventh of the country after completing the transaction. This acquisition closes in the midst of the OPA that BBVA has launched on the Catalan Bank, which defends that the transaction represents a “strategic opportunity” and that is “extraordinarily beneficial” for both the group and for the shareholders, and that it has summoned a shareholders meeting on August 6.
The Cantabrian Bank had presented an offer this Monday to get the TSB for about 2.3 billion pounds, which would be about 2,686 million. This is the second draft operation of the entity in just two months. The bank closed on May 5 the sale of 49% of the capital that it kept in the Polish subsidiary for about 6.8 billion euros. Now the Cantabrian entity has taken advantage of the express sale process organized by Sabadell to expand its presence in the United Kingdom. This operation occurs in the middle of the OPA that BBVA wants to launch on Sabadell. This Monday, When it was already known that Santander had made a binding offer for TSBBBVA reported its intention to continue with the OPA, after analyzing the condition imposed by the Government.
Market sources point out that “legally it seems that it does not fulfill the duty of passivity” and the OPA imposes on the Board of Directors of Sabadell a duty of passivity that limits the actions that can be carried out to go against the success of the offer, unless authorization of the Board. This assumes that Sabadell will have to summon its shareholders to approve the sale of TSB if it materializes within the OPA acceptance period.
Banco Sabadell has convened the General Meeting of Extraordinary Shareholders to approve the sale of TSB to Banco Santander on August 6as reported by the Catalan entity on Tuesday in a statement. The bank will consult shareholders not only for the sale of the British entity, but also for the distribution of an extraordinary dividend as a result of the operation.
With this new payment, Sabadell hopes to distribute 3.8 billion euros in the next 12 months. Specifically, the sale of TSB will be submitted to the Board for a minimum price of 2,650 million pounds (3,100 million euros). In response to the financial forecasts of TSB, and assuming that the closure of the operation occurs on March 31, 2026, Sabadell estimates that the definitive price of the shares could be located around 2,875 million pounds sterling (approximately 3,361 million euros).
Reinforcement of the position in the United Kingdom
The TSB is a commercial bank with a long career in the United Kingdom and has a commercial network of 218 offices and a growing digital business. It has up to five million customers, especially in the segment of individuals and small businesses, with mortgages of 34,000 million pounds (market share of 2% in the United Kingdom) and deposits worth 35,000 million pounds. “This acquisition reinforces the position of Banco Santander in one of its key markets by substantially expanding its number of clients and their credit granting capacity. Santander UK would become the third bank of the country due to current balances of private clients and fourth by mortgages. Together, both banks would serve about 28 million private clients and companies throughout the country. TSB customers will be able to access the Santander International Network and benefit from the most advanced technological platforms of the group, “says Santander Bank in a note sent to the National Securities Market Commission.
A recent Alantra report collected that the United Kingdom is a business with a low profitability within Santander and, usually, it is not the favorite option of investors in terms of capital allocation. However, The firm pointed out that the purchase of TSB could be a “small complementary merger” for Santander with the capacity to generate significant synergies and with little risk.
Both entities, TSB and Santander UK, are specialized in British mortgage market, so they could benefit from economies of scale. In fact, Santander has a 10.5%mortgage market share, behind Lloys (about 19%), Nationwide (16%) and Natwest (12%). For its part, TSB occupies the ninth place, with a share of 2%.
Pact of non -competence and extraordinary compensation
Sabadell has committed to Santander that no group in the group will compete with Santander in the United Kingdom banking market During the next 24 months of the closing date of the operation, without prejudice to the maintenance of the activities of the branch available to Sabadell in the United Kingdom. The Catalan entity has also promised that none of its societies will hire TSB employees during the same period, subject to certain usual exceptions in this type of transactions.
The information sent specifies, however, that None of the above commitments will be applied to BBVA or entities of your group in the event that the OPA has a positive resultor to reach most vote rights.
On the other hand, they have agreed extraordinary compensation in the event that, having not authorized the operation of the shareholders, Sabadell agreed before December 31, 2025 the sale of TSB to another entity for a price higher than the agreed with Santander and said operation becomes consummated. In this case, Santander will have the right to receive compensation for 26.5 million pounds sterling (approximately 30.98 million euros)equivalent to 1% of the 2,650 million euros, or, if lower, 70% of the difference between the sale price agreed by Sabadell with the third and the price agreed with Santander.
If the OPA had a positive result to achieve most vote rights, this extraordinary compensation would only be payable to Santander in the event that Sabadell had agreed to the sale of TSB to another entity for a price higher than agreed with Santander prior to the OPA settlementprovided that the operation is subsequently consummated.
