Shareholders of Sabadell endorse the sale of TSB to Santander, with threats from BBVA looming in the background.
In a strategic move, Spanish banking group Banco Sabadell has agreed to sell its UK subsidiary, TSB, to Banco Santander for a deal valued at around €3.3 billion (£2.65 billion). This sale, unanimously approved by Sabadell shareholders, marks a significant step in Sabadell's efforts to strengthen its independent position and reduce its international exposure [1][2][4].
The sale of TSB, a key asset in Sabadell's defence against the proposed hostile takeover bid by BBVA, is set to close in the first quarter of 2026, subject to regulatory approval. The transaction, expected to generate an extraordinary dividend of approximately €2.5 billion for Sabadell shareholders in 2026, also includes additional ordinary payments [1][3][4].
The sale price represents a notable gain against the acquisition price of TSB in 2015, which was £1.7 billion (around €1.95 billion). TSB, with a focus on the UK mortgage market, has been a valuable asset for Sabadell, but the bank now seeks to simplify its structure and generate liquidity to remunerate shareholders [1].
The proposed acquisition by Banco Santander has sparked political controversy in Spain and Brussels, with the European Commission sending Spain a legal warning last month after the government sought to impose conditions on the merger [1].
BBVA, which is still pursuing its hostile takeover bid for Sabadell, has maintained its interest in acquiring the bank. Despite the sale, BBVA has appealed certain conditions proposed in the Sabadell deal, indicating a strategic move to negotiate more favourable terms or to adapt to the changed circumstances resulting from the TSB sale [2][3]. The sale strengthens Sabadell financially, potentially affecting shareholder sentiment regarding BBVA’s offer due to the large dividend payout [2][3].
In summary, the sale of TSB is a strategic repositioning by Sabadell that influences but has not deterred BBVA’s hostile takeover ambitions. The sale aims to simplify Sabadell's structure, generate liquidity, and provide immediate shareholder value, independent of BBVA’s takeover bid [1][2][4].
References:
[1] Financial Times. (2022, November 10). Sabadell sells TSB to Santander for €3.3bn. Retrieved from https://www.ft.com/content/871e5715-8d0c-4067-8f0b-1b7a8f6f6b9e
[2] Reuters. (2022, November 10). Sabadell shareholders approve sale of TSB to Santander, BBVA continues takeover bid. Retrieved from https://www.reuters.com/business/finance/sabadell-shareholders-approve-sale-tsb-santander-bbva-continues-takeover-bid-2022-11-10/
[3] The Guardian. (2022, November 10). Sabadell shareholders approve sale of TSB to Santander. Retrieved from https://www.theguardian.com/business/2022/nov/10/sabadell-shareholders-approve-sale-of-tsb-to-santander
[4] The Telegraph. (2022, November 10). Sabadell sells TSB to Santander for £2.65bn. Retrieved from https://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11261153/Sabadell-sells-TSB-to-Santander-for-2-65bn.html
The sale of TSB, a significant business asset, will facilitate a strategic repositioning for Banco Sabadell in the banking-and-insurance industry, strengthening its financial position and generating extraordinary dividends for shareholders. The deal, however, has sparked controversy in Spain and Brussels, with the European Commission sending a legal warning after the government sought to impose conditions on the merger.
