Santander enters the takeover bid for Sabadell: the keys to the TSB acquisition

MadridBanco Santander has just burst into the hostile takeover bid by BBVA for Banc Sabadell, whether it wanted to or not, after a Agreement with the Catalan bank for the purchase of its British subsidiary, TSBThe sale will allow the Vallecas-based bank to distribute an extraordinary dividend to its shareholders. This incentive, chaired by Josep Oliu, is using to discourage shareholders from considering a merger with BBVA attractive, leading them to decide not to accept the offer and, consequently, derail the takeover bid. Beyond the coincidence between the two transactions, these are all the key factors surrounding the TSB operation:

What consequences could this have for the takeover bid?

From the outset, BBVA already stated on Monday that it will continue with the offer despite the Spanish government's condition that the two entities remain separate for three to five years. Furthermore, it said this the day before Sabadell's board meeting, assuming that the bank could make a move on TSB, financial sources told ARA.

If the acquisition of TSB goes through, BBVA will find itself facing a smaller bank. Therefore, some see the sale of the subsidiary as another obstacle to the takeover bid. With the sale, if the offer is maintained, the price will be adjusted, which would be equivalent to an increase. In any case, minority shareholders accept Sabadell's thesis that there is no offer at the moment, because there is no price (in addition to a negative premium due to the stock market performance, the Catalan bank, they believe, is better than what BBVA is offering). Sabadell has also linked the collection of the extraordinary dividend for the purchase of TSB to holding the bank's shares when the transaction closes (in the first quarter of 2026).

It will also not allow BBVA to set foot in the United Kingdom, which could be of interest to rebalance the balance between emerging markets, where the Bilbao-based bank currently has the bulk of its business, and non-emerging markets.

However, Carlos Torres's bank is focused on gaining a foothold in Spain, where it can compete with Santander and CaixaBank, currently the largest bank in terms of asset volume. That's why some doubt whether BBVA would have been interested in remaining in the United Kingdom or moving forward in the long run. "It already left Portugal because, despite not being an emerging market, it didn't have a ladder," market sources recall.

What role will Sabadell shareholders play?

Sabadell shareholders have two important votes ahead of them. The one on August 6th, within the framework of the extraordinary general meeting, in which they will have to endorse the sale of TSB and also the distribution of an extraordinary dividend from the proceeds the bank will obtain.

The other vote is on the takeover bid and will be longer. This second vote will begin once the National Securities Market Commission (CNMV) accepts BBVA's prospectus. The bank is finalizing this document, which, among other things, must include the impact of the Spanish government's status on cost savings. The preparation and approval of the prospectus is expected to take two to three weeks, so the clock on this vote would start ticking at the end of July.

Once underway, BBVA may decide to extend it for 30 or 70 days. Considering that the bank has already stated that it doesn't see the possibility of a deadline of August, it is taking the 70-day option quite seriously, so Sabadell shareholders could vote until the end of September on whether to accept the offer and the takeover bid is successful. If, during this period, Sabadell divests TSB, as planned, BBVA can always add a supplement to the prospectus indicating how this affects the transaction. Finally, if more than half of the shareholders accept BBVA's offer, it would take control of Sabadell.

What interest does Santander have in Sabadell's British subsidiary?

The United Kingdom is not a new market for Banco Santander. It arrived in the country in 2004 with Santander UK. However, its presence there has not always been peaceful, and in 2025, the bank chaired by Ana Botín has found itself immersed in rumors of a possible departure from the country following information published by the Financial Times. Botín herself denied it..

One of the keys that explain the interest in TSB is the possibility of continuing to grow in the country, especially in the business retail or retail: individuals (mortgages and bank accounts), self-employed workers, and SMEs. This allows it to complement Santander UK and TSB and, therefore, achieve significant synergies or cost savings, whether through workforce reductions or branch closures, but above all through technological integration, where Santander has always boasted experience and strength. Specifically, Ana Botín's bank estimates synergies of up to €400 million.

The other incentive is to continue gaining strength in a non-emerging market like the United Kingdom, which allows it to rebalance its presence in emerging and less stable countries, some of which have a less robust currency than the pound. Likewise, with TSB, it also gains scale in the United Kingdom: Santander would position itself as the third-largest bank in the country. "When interest rates are low, the only thing that helps you is having a lot of scale," recalls a financial source.

Finally, Santander has just sold its Polish business and therefore has sufficient capital to carry out the transaction. In fact, with the proceeds it has obtained from its exit from Poland, it has even more room to continue exploring other acquisitions.

How did the negotiations for TSB begin?

"It's one of the fastest acquisition processes ever carried out," acknowledged Banco Sabadell CEO César González-Bueno at a press conference on Wednesday. Less than three weeks have passed since the first reports appeared.

It all began with the British bank NatWest Bank, financial sources explain, which decided to "approach" Banc Sabadell with a takeover bid for TSB. The fact that NatWest Bank came knocking on the Catalan bank's door generated excitement in the market and Sabadell initiated an auction process for the British subsidiary. At that moment, Santander and Barclays joined the competition.

Sabadell executives have reiterated that the move has nothing to do with the hostile takeover bid, but it is clear that the acceleration of the deadlines has allowed the Catalan bank to boost its shareholder remuneration, a weapon that Josep Oliu has used since the start of the takeover bid.

"Everything happened very quickly," says a source close to Sabadell. Time constraints have left NatWest Bank out of the equation, and the fight for TSB remains between Santander and Barclays. The fight, despite being tight, ultimately won by Ana Botín's bank, which raised the offer to €3.1 billion. Now, in addition to the endorsement of Sabadell's general shareholders' meeting, the purchase of TSB will require the approval of various regulatory bodies.