Banco Santander has completed this Thursday the acquisition of Webster Financial Corporation, one of the largest international operations undertaken by the entity chaired by Ana Botín.
The Spanish bank announced in February an agreement valued at approximately 12.200 million dollars, about 10.300 million euros at the exchange rate used then. The agreed consideration amounts to 75 dollars for each Webster share, divided between 48.75 dollars in cash and 2.0548 shares of Santander.
The expected date to formally complete the operation was this August 20, after the group obtained the authorizations from the Office of the Comptroller of the Currency of the United States, the European Central Bank, and the Federal Reserve. Today, in a statement, Santander has ratified the operation as previously announced.
What Santander buys
Webster is a regional bank based in Connecticut with a particularly relevant presence in the northeast of the United States.
The entity contributes more than 80.000 million dollars in assets, a network of nearly 200 offices, retail and commercial banking business, specialized financial services, and a prominent position in health savings accounts, known as HSA.
The combination allows Santander to expand its scale in one of the most competitive banking markets in the world and reduce its dependence on the automobile financing business.
How much Santander has paid
The announced value of the operation was approximately 12.200 million dollars. The final figure may vary in euros due to the exchange rate and the evolution of Santander's stock, as part of the payment is made through bank shares.
| Concept | Announced data |
|---|---|
| Approximate value of the operation | 12.200 million dollars |
| Cash payment per Webster share | 48.75 dollars |
| Santander shares per Webster share | 2.0548 |
| Announced value per share | 75 dollars |
| Expected cost synergies | 800 million dollars |
What position it reaches in the United States
Santander estimates that the combination will place it among the ten main retail and commercial banking entities in the United States, with approximately 327.000 million dollars in combined assets.
This ranking does not necessarily equate to being the tenth largest American bank by consolidated assets. It depends on the perimeter used and the segment analyzed.
The profitability objective
The entity expects to obtain around 800 million dollars in cost synergies and achieve a return on tangible equity, or ROTE, of 18% in the United States by 2028.
Santander also foresees that the purchase will improve earnings per share once the integration is completed.
These figures are business targets, not guaranteed results. Their fulfillment will depend on integration costs, the evolution of interest rates, credit quality, and the ability to retain customers and deposits.
Why Santander is growing while other European banks are retreating
The operation contrasts with the withdrawal or reduction of retail activity by other large European groups in the United States.
Santander believes it needs to gain scale to compete profitably. Webster provides deposits, offices, commercial customers, and a regional presence that complements its U.S. business.
The bet also geographically diversifies the group's revenues, although it increases its exposure to regulation and the North American economic cycle.
The risks of the purchase
The acquisition also presents several challenges: integrating technological platforms, materializing 800 million dollars in savings, avoiding the loss of customers and employees, maintaining credit quality, managing the cost of deposits, meeting profitability targets, and absorbing the impact of the capital increase used to finance part of the payment.
The creation of value will depend on whether future profits compensate for the price paid and the dilution caused by the new shares.