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(Sharecast News) - Santander has agreed to buy America's Webster Bank in a $12.2bn deal, as the Spanish lender looks to expand its global reach and strengthen its presence Stateside.
Announcing the cash and stock deal late on Tuesday, alongside full-year numbers, Santander said the tie-up would create a top ten retail and commercial US bank by assets, with a large presence across the north east.
It is also expected to "accelerate Santander US's path to top-tier profitability and efficiency". US return on tangible equity is expected to reach 18% by 2028.
Ana Botin, group chief executive, called the acquisition an "exciting step forward".
She continued: "This transaction is strategically significant for our US business, while remaining a bolt-on for the overall group. It allows us to strengthen our franchise in both scale and profitability, improving our funding mix and economics, including lower funding costs."
However, investors appeared less enthused, and by 1000 GMT on Wednesday the stock had fallen 4% in Madrid and by 4% to 923.6p in London.
Santander will pay $75 a share, $48.75 of which will be in cash, for Webster, which was founded in Connecticut in 1935. It has more than $80bn in assets.
Shares in parent Webster Financial were up 1% in pre-market trading.
The Spanish bank, the European Union's most valuable, has been shaking up its global footprint. Last year it sold stakes in its business in Poland, but won a battle with Spanish rival Sabadell for control of TSB.
However, Botin told the Financial Times that the Webster deal brought the run of mergers and acquisitions to a close. "No more purchases. And we're not thinking about selling anything either."
Santander's full-year numbers, meanwhile, met market expectations, with revenues up 4% at 62.4bn on a constant currency basis, and profits 16% stronger at 14.1bn. Customer numbers increased by 8m to 180m.
In the UK, total revenue improved 2.4% to 4.5bn. Pre-tax profits rose 1.2% to 1.5bn, after provisions widened to 461m. Along with other lenders, Santander is in discussions with the Financial Conduct Authority about the regulator's proposed motor finance compensation scheme.