Lloyds and TSB have agreed to a £1.7bn takeover by the Spanish Banco de Sabadell.
TSB, which rejoined the stock market less than a year ago, has agreed to a £1.7 billion takeover by Spanish bank Sabadell. The deal will also see Lloyds sell its remaining 50 per cent stake in TSB to Sabadell for 340p per share.
Sabadell, Spain’s fifth largest bank, plans to expand its reach into other nations in the European Union in order to diversify and offset the weak growth in its domestic market.
The deal now only awaits the seal of approval from UK regulator the Prudential Regulatory Authority.
Competing with Santander
In a press release, the chairman of Sabadell Josep Oliu Creus noted that Sabadell and TSB share similar views on the need to focus on customers and local communities.
TSB’s chairman, Will Samuel, noted: “The offer from Sabadell represents a significant endorsement of TSB’s progress since its IPO, and provides TSB shareholders the opportunity to receive today in cash the value that would otherwise be unlocked over time as TSB executes its strategy.”
When the takeover is completed, it will give Sabadell its first European business outside of Spain - bringing it a step closer to competing with Spanish rival bank Santander.
UK mortgage market opened up
It will also open up the UK’s competitive and lucrative mortgage market to Sabadell at a time when most other banks are still wary of expanding into markets abroad.
“We see the UK as an attractive market with a strong regulatory framework, sound macroeconomic fundamentals and exciting prospects for growth,” said Mr Creus.
“We believe that our experience of growing SME lending, our resilient and tested IT platform and our commitment to innovation will speed up TSB’s expansion so that it fulfils its potential as a strong and effective challenger to the traditional UK banks, without any of their legacy issues,” he added.
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