Banco Santander has made a move in the United States with one of the largest corporate transactions in its recent history. The bank, chaired by Ana Botin has reached an agreement to acquire Webster Financial CorporationWebster Bank's parent company, for $12.200 billion, with the aim of decisively strengthening its presence in the North American market and gaining size in retail and corporate banking.
The purchase of Webster comes at a time when the Spanish group is facing a string of losses. historical benefits —€14.101 billion in 2025, the highest result ever recorded by a Spanish bank— and after several significant transactions in Europe, such as the acquisition of TSB in the UK and the partial sale of its business in Poland. With this move, the bank accelerates its shift in growth focus towards The United States and the Northeast, an area that Botín herself had identified on several occasions as a priority.
Details of the transaction and price paid
According to the documentation submitted to the National Securities Market Commission (CNMV)The Spanish bank values Webster at $12.200 billion, approximately €10.100-10.300 billion at the current exchange rate. The consideration amounts to $75 per share of Webster, structured in two tranches: $48,75 in cash and 2,0548 newly issued Santander shares in the form of American Depositary Shares (ADS) for each share of the US entity.
This price represents a approximate premium of 14% on the weighted average value of Webster's shares in the three days prior to the announcement, when they were trading around $65,75. After the operation was made public, the stock market reaction has been mixed: Webster's shares rebounded by around 9%while Santander's shares listed in New York suffered drops of more than 6%, reflecting the typical market adjustment following a large acquisition paid for in part with equity capital.
The payment scheme combines approximately one 65% in cash and 35% in new shares Santander, which necessitates a significant capital increase. The bank estimates this capital increase to be around 3.500-3.700 billion eurosdepending on the price of its shares. Despite this, the bank insists that the use of its excess capital and future generation will allow them to maintain a comfortable solvency position.
In terms of valuation, the price paid implies paying around 6,8 times the estimated profit for 2028 Webster's once cost synergies are incorporated, and approximately 2 times its tangible book value at the close of the fourth quarter of 2025. The group estimates that the return on invested capital will be around 15% and that the operation will provide an increase of 7%-8% to earnings per share of the group in 2028.
Impact on capital, solvency and financing
The entity emphasizes that the purchase of Webster will be financed primarily with surplus capital and the generation of resources themselves of the group. Santander closed 2025 with a top-quality capital ratio CET1 of 13,5%, above the bank's target range of 12% to 13%. After the transaction is completed, the bank estimates that this ratio will be around 12,8% and will exceed 13% again in 2027, remaining at the upper end of its reference range.
Webster's contribution amounts to approximately 4% of total assets from Santander, so the purchase is part of the strategy of complementary acquisitions, known in the sector as operations bolt-on, designed for accelerate organic growth without excessively straining capital. In this context, the entity also has the cushion generated by recent divestments, such as the sale of a majority stake in its subsidiary of Poland, which brought him billions in resources and capital gains.
From a financing perspective, the integration of Webster will improve the funding profile in the United StatesThe group expects the loan-to-deposit ratio in that market to be close to 100%, compared to the current 109%, thanks to the solid base of high-quality deposits provided by the acquired bank. This improvement in the balance between credit and savings should translate into a reduction in financing costs of the American business.
One of the key messages to the market is that this acquisition will not alter the plans of shareholder remunerationThe board has confirmed its objectives of returning approximately [amount missing] to investors between 2025 and 2026. 10.000 millones de euros through dividends and share buybacks, in addition to a further program of buyback of 5.000 billion recently approved. In fact, Ana Botín has argued that the capital increase resulting from the acquisition of Webster will be offset, in terms of value creation, by these share buybacks.
Santander's position in the United States after the purchase
The United States has established itself in recent years as one of the main profit drivers of the group. In recent years, the North American subsidiary has recorded significant growth in net income and profitability, supported by the consumer finance business, especially in the segment of car loan, and in the expansion of its investment banking business.
With the integration of Webster, Santander will become one of the ten largest retail and corporate banking entities of the United States by asset volume, and will be among the top five by deposits in the key northeastern states where it intends to focus its growth. The group estimates that, following the acquisition, its combined balance sheet in that market will reach approximately $327.000 billion in assets, with approximately 185.000 billion in loans and 172.000 billion in deposits.
The Northeast region—with states like Connecticut, Massachusetts, New York, and New Jersey—represents an area of high purchasing power and a high density of individual and business customers. In Botín's own words, the economic weight of this area is comparable to that of “all of the United Kingdom"This justifies the group's decision to create a large regional bank instead of seeking, for now, a homogeneous physical presence throughout the country."
The operation also aligns with the deployment of OpenbankSantander's digital banking platform, which launched in the United States in 2024. While Openbank primarily targets a digital audience and online deposit acquisition, Webster offers a consolidated branch network and a strong relationship with local customersThis allows the group to combine physical and digital channels in a particularly competitive market.
In the regulatory outlook, the integration of Webster will bring Santander closer to the threshold set by the Federal Reserve (FED) To be classified as a bank with “significant exposure” in the United States—known as Tier III—a status achieved by exceeding $250.000 billion in assets in the country. This level entails stricter regulatory requirements, but also reinforces the entity's position among the major players in the North American financial system.
Who is Webster and why does he fit into the group's strategy?
Webster is an American bank with a long trajectory, founded in 1935 and headquartered in Stamford (Connecticut)Its activity focuses on retail and corporate banking, as well as certain specialized niches such as financial services for the health sectorThe entity is particularly well positioned in high-income markets and in the financing of medium-sized companies, segments considered strategic by Santander.
Santander's US franchise, for its part, has historically relied on the consumer finance, especially in the auto loan division, and in recent years has expanded its presence in investment banking. The fit between the two banks is considered very high: Webster contributes a diversified and high-quality deposit base, a network of business clients and outstanding operational efficiency, while Santander adds international reach, technological muscle and product capability.
According to figures provided by the group, Webster is among the more efficient and profitable entities of its segment in the United States. This characteristic is key to the aspirations of the Spanish bank, which wants to increase the profitability of its business in the country and bring it closer to the levels of its best franchises globally.
The acquisition of Webster adds to other previous operations with which the group has been adjusting its scope. In Europe, the purchase of TSB in the United Kingdom And the sale of a large percentage of its subsidiary in Poland shows a clear pattern: rotating assets, divesting less strategic businesses and strengthening its presence where it sees more potential for profitable growth, including the United States and Mexico, markets that Botín herself had mentioned as priorities for years.
The bank insists that the transaction does not alter its strategy. organic growthRather, it accelerates growth, while also allowing Santander to capture additional revenue opportunities and improve its business mix in one of its key markets. Until the transaction is fully completed, both Santander and Webster will continue to operate independently, with no changes to accounts, branches, or services for customers of either entity.
Synergies, efficiency and profitability objectives
Beyond the increase in size, one of the operation's greatest strengths lies in the cost synergies and in improving efficiency. Santander estimates recurring savings of close to 800 millionThese savings represent approximately 19% of the combined cost base of both entities in the United States. They will come from the integration of central structures, the unification of technology platforms, renegotiation with suppliers, and process optimization.
In operational terms, the aggregate cost base of the combined businesses, which currently stands at around 4.451 million, it would gradually decrease until it was around 3.500 million within three years. To achieve this, the group plans a restructuring cost close to $1.600 billion, intended to cover organizational adjustments, systems integration and other expenses associated with the merger process.
The goal is for the ratio of efficiency of the business in the United States —which measures the relationship between expenses and income— falls below the 40% in 2028, a level that would place the combined entity among the most outstanding in the country in terms of cost control. At the same time, Santander aims for the return on tangible capital (RoTE) of its American franchise reach the 18% within that same time frame.
These goals are part of a broader strategy by the group, which pursues a global RoTE above 20% by 2028Management considers the acquisition of Webster to be "strategically key" to reaching that figure, both for the direct contribution of the US business and for the improvement in the risk, profitability and funding profile of the bank as a whole.
At the same time, the entity insists that the operation has been designed maintaining a strict discipline in capital allocationThe use of excess capital, combined with organic generation and a limited acquisition size in relation to the total balance sheet, allows the group to sustain its dividend and share buyback policy without having to give up other growth projects in Europe or Latin America.
Governance, integration and management team in the USA
The reorganization of the management team In the United States, this is another relevant element of the transaction. After the purchase is finalized, Christiana Riley will continue to act as country head of Santander in the United States and CEO of Santander Holdings USA (SHUSA), maintaining ultimate responsibility for the strategy and oversight of the group's business in the country.
Webster's current CEO, John Ciulla, will go on to manage Santander Bank NAThe entity that will bring together all of Webster's businesses and will be integrated into the group's structure. Alongside it, Luis MassianiWebster's Chief Operating Officer (COO) will assume the same role at both SHUSA and Santander Bank NA, with the mission of leading the integration process and coordinate the operational unification of both entities.
The group's idea is to largely preserve the Webster management team and leverage its knowledge of the local market, especially in retail and corporate banking in the northeastern United States. The bank has indicated that it wants to ensure continuity of relationships with clients and communities, a sensitive issue when mergers occur between deeply rooted regional entities.
Regarding the corporate structure, Webster's current headquarters in Stamford is destined to become a key corporate center within Santander's network of strategic locations in the United States, which also includes cities like Boston, New York, Miami, and Dallas. In this way, the group strengthens its physical presence in a key economic corridor of the country.
For the design and execution of the operation, Santander has relied on the financial advice of Centerview Partners, Goldman Sachs and Bank of America Europe DACOn the legal front, the entity has relied on Davis Polk & Wardwell LLP as a leading law firm in the United States and in Uría Menéndez as legal advisor in Spain, a common partnership in the group's major transactions.
The transaction is subject to the regulatory authorizations usual in transactions of this type and subject to the approval of the shareholders of both entities. The timeline used by Santander places the final closing in the second half of 2026, from which point the anticipated cost and revenue synergies will begin to materialize progressively.
The agreement to acquire Webster consolidates Banco Santander as one of the major European players with a significant presence in the United States and reinforces its strategy of combining organic growth and selective acquisitions in key markets. The entity is coming off a year of record results, maintaining its shareholder remuneration policy and, at the same time, is committed to a transaction that will allow it to gain scale, improve its efficiency and increase the profitability of its business in the world's largest financial market, especially in the northeastern United States, where it aspires to be a leader in retail and corporate banking.
