M&A
Santander's Acquisition of TSB
An examination of Santander's £2.65 billion purchase of TSB, with insight into Sabadell's reasons for selling and how the price was set
Younas Ficel ·
At the end of April, Santander UK completed its acquisition of TSB from Spanish bank Sabadell, making it the UK's third largest bank by personal current account balances and fourth largest mortgage lender. The deal was agreed in July last year for £2.65 billion in cash.
Sabadell had owned TSB since 2015, including through a major IT failure in 2018. The sale came while Sabadell was defending a hostile takeover bid from BBVA, and allowed it to promise shareholders a special dividend of around €2.5 billion. Santander beat Barclays to the deal, having previously acquired Abbey National, Alliance & Leicester and Bradford & Bingley.
Santander paid around 1.45 times TSB's tangible book value, a common way of valuing banks. The final price also included an adjustment of around £213 million for the value TSB built up between 1 April 2025 and completion, protecting Sabadell from handing over months of profit for free. Santander expects at least £400 million of cost savings from merging TSB into Santander UK.
Sabadell's sale was as much about defending itself against BBVA as about the price it received. Bank sales are rarely decided on price alone.
In an interview
Why it matters: Sabadell's sale was driven as much by its defence against BBVA's hostile bid as by price.
Use it to: show you understand how banks are valued, using price to tangible book value, and why a seller's wider position matters in a negotiation.
Likely question: "What is driving consolidation in UK banking?"
Sources
- Santander, ‘Santander to acquire TSB from Sabadell for £2.65 billion’ (July 2025)
- Santander UK, ‘Santander UK completes cash acquisition of TSB Banking’ (April 2026)
- AJ Bell, ‘Banco Santander now 3rd largest UK deposit taker as completes TSB buy’ (May 2026)