Santander to acquire TSB rom Sabadell in GBP2.65B deal

Santander (SAN) announced that it has reached an agreement to acquire 100% of TSB Banking Group from Banco de Sabadell (BNDSY), with a valuation of GPB2.65B, or approximately EUR3.1B, in an all-cash transaction. The transaction is expected to generate cost synergies of 13% of the combined business’s cost base, equivalent to at least GBP400M pre-tax. To deliver these synergies, Santander expects to incur GBP520M of pre-tax restructuring costs during 2026 and 2027. At Santander group level, the transaction would be accretive to earnings per share from the first year and of about 4% by 2028 and consume approximately 50 basis points of CET1 capital. Santander is expected to operate with an approximately 13% CET1 ratio at year-end 2025 on a pro forma basis for both the sale of 49% of Santander Polska and associated share buyback in early 2026 announced on 5 May 2025, and the acquisition of TSB. The transaction is consistent with Santander’s strict capital hierarchy and will not affect the existing distribution policy. Santander’s 2025 objectives remain unchanged. The transaction remains subject to regulatory approvals and Sabadell shareholder approval. Completion of the transaction is expected to occur in the first quarter of 2026.