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The Tercio de Cerdeña was raised in 1536, originally under the name of Tercio de Málaga. Manned mainly by veteran Spanish soldiers, it was garrisoned in Cagliari, Nuoro and Sassari, and was soon renamed Tercio de Cerdeña (Sardinia).

In 1564 command devolved to Maestre de campo Gonzalo de Bracamonte and from that year on the tercio fought in Corsica, la Goleta, Malta, Sardinia, Napels and the Low Countries. In Flanders it took part in the battles of Heiligerlee (23 May, 1568) and Jemmingen (21 July, 1568), the last one a resounding Spanish victory.

It has been said of the Spanish tercio soldiers that they were arrogant, obstinate and undisciplined – except in battle, when they were unbeatable. But the soldiers of the Tercio de Cerdeña proved to be a particularly undisciplined lot. They suffered heavy losses at Heiligerlee (on in four soldiers, according to one estimate) because they attacked too early (they had been ordered to wait for reinforcements) and without adopting the proper formation. As a consequence their commander, Count Arenberg, died at the head of the tercio.

After the battle it was rumoured that many soldiers of the tercio who sought refuge in the nearby villages and farms had been killed by the inhabitants. Therefore, when they reconquered the territory around Heiligerlee between 22 and 25 July, 1568, the soldiers of the Tercio de Cerdeña exacted their revenge on the civilian population in such a manner that even the cold-blooded Captain-General, the Duke of Alba, was shocked. On 26 July he ordered the tercio to be disbanded. Two days later the staffs of its banderas were formally broken in front of the assembled Army of Flanders, its Captains dismissed from the King’s service and its ordinary members dispersed among the other tercios. Only one captain was retained; he had been absent with leave during the excesses.

Meanwhile a Tercio Nuevo de Cerdeña had been raised in Sardinia, consisting mainly of Italians. It was standing practice whenever a tercio left its territorial station to raise a new one as replacement and as a source of reinforcements for the other. This new tercio is sometimes confused with the tercio viejo. In 1571 a unit of 400 muskeeters, said to be from the Tercio de Cerdeña, performed valiantly in the battle of Lepanto. There is no doubt that these musketeers belonged to the new tercio.