Banco Sabadell rises after it agrees to sell British unit

** Shares of Spain's Banco Sabadell SAB rise around 3% after Santander SAN said on Tuesday it had reached an agreement to buy its British unit TSB

** The all-cash deal is initially for 2.65 billion pounds ($3.64 billion), subject to approval by Sabadell shareholders

** Sabadell's decision to dispose of TSB offers the lender a potential defensive play as it seeks to stop a hostile takeover approach from another Spanish heavyweight, BBVA BBVA

** Sabadell said proceeds from the sale would be used to fund a 0.50 euro per share extraordinary cash dividend, equivalent to 2.5 billion, in addition to 1.3 billion of ordinary dividends expected to be paid from 2025 earnings

** Sabadell's stock is among top movers on STOXX 600 banking index (.SX7P)

** Santander is up around 2% at 0718 GMT