Santander has agreed to acquire TSB for £2.65billion, defeating a rival bid from Barclays to create Britain's second-largest bank by personal current account market share.
The deal will see the combined entity serve approximately 28 million retail and business customers across the UK, significantly strengthening Santander's position in one of its core markets.
This acquisition comes just months after Santander rejected takeover approaches from both NatWest and Barclays for its own UK retail operations due to pricing disagreements.
TSB's Spanish owner Sabadell will put the transaction to shareholders for approval at a meeting on August 6, 2025.
Santander is set to takeover TSB in a major deal
|PA
The sale comes as Sabadell faces an approximately £11billion hostile takeover bid from Spanish rival BBVA, which announced on Monday it would proceed with its offer despite government opposition effectively blocking a full merger for at least three years.
Sabadell purchased TSB in 2015 for £1.7billion and noted the deal's value could increase to £2.9billion when including TSB's estimated profits until the expected completion in the first quarter of 2026.
BBVA awaits approval from Spanish market regulators for its bid, which could come this month, before making a formal offer to Sabadell shareholders.
TSB currently operates 218 branches and outlets nationwide whilst serving around 5 million customers, primarily in personal and small business segments.
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Following this acquisition, Santander will serve 28 million retail and business customers
| PACurrently, the bank holds £34billion in mortgages and £35 billion in deposits, with a growing digital presence alongside its physical network.
The acquisition will provide TSB customers with access to Santander's international network and technology platforms, marking a significant expansion of services.
Combined with Santander's existing operations, the merged entity will create a formidable presence in UK retail banking, particularly in personal current accounts where it will become the second-largest provider by market share.
Ana Botín, Banco Santander's executive chair, outlined what this acquisition means for the banking giant and its customers going forward.
She explained: "The acquisition of TSB represents a continuing strategic commitment to our customers in the UK, offering a compelling opportunity that is financially attractive to our shareholders and aligned with Santander's long-term objectives."
Botín added that the transaction would accelerate the bank's path to greater profitability in the UK and help achieve a return on tangible equity of 16 per cent by 2028.
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| GETTYMike Regnier, CEO of Santander UK, said: "This is an excellent deal for customers combining two strong and complementary banks, creating one of the most substantial banks in the UK and materially enhancing the competitiveness of the industry.
"At Santander UK we have momentum in our strategy to become the best bank for customers in the UK by investing in technology and service and improving our processes and efficiency.
"This deal accelerates our transformation allowing us to enhance our customer proposition and invest more in innovative products and our digital offering, supported by the human touch service so many appreciate, not least in our new branch formats and enhancements across the country.
"We are fully committed to ensuring a seamless integration, by leveraging our market leading technology and significant experience. Maintaining the highest levels of service for customers across both banks will be a key priority and we will support all colleagues through the transition, as we invest in building a stronger bank for the future."