Banco Santander has agreed to acquire Webster Financial Corporation in a deal valued at $12.2 billion, creating a top-ten retail and commercial bank in the United States by assets. The acquisition, announced on , aims to bolster Santander’s presence in the U.S. Market and achieve an 18% return on tangible equity (RoTE) by .
Under the terms of the agreement, Webster shareholders will receive $48.75 in cash and 2.0548 Santander American Depositary Shares for each Webster common share. This equates to a total consideration of $75 per Webster share, based on Santander’s three-day volume-weighted average price ending , and an exchange rate of 1.1840 EUR/USD as of that date. The transaction values Webster at 6.8 times its projected 2028 price-to-earnings ratio post-synergies and 2.0 times its fourth-quarter 2025 price-to-book value.
Santander Chair Ana Botín described the acquisition as a “historic step” and emphasized its importance in achieving the scale necessary to compete effectively in key markets. She stated the deal would strengthen Santander’s franchise in both scale and profitability, improving its funding mix and economics, and lowering funding costs. Botín also indicated this acquisition marks the end of Santander’s current merger and acquisition activity, stating, “No more purchases. And we’re not thinking about selling anything either.”
The combined entity will be a top-five deposit franchise across key states in the U.S. Northeast, leveraging Santander’s strength in consumer finance and Webster’s established commercial franchise and high-quality deposit base. Santander anticipates approximately $800 million in combined cost synergies, representing around 19% of the combined cost base.
Investors reacted negatively to the announcement, with Santander’s depositary receipts closing down 6.4% in New York trading on . Botín attributed this decline to M&A arbitrage trading.
This deal represents a notable move for Santander, which is expanding its presence in the Anglosphere, having recently completed a £2.65 billion acquisition of TSB in the UK in . The acquisition of Webster contrasts with the retreat of other European banks, such as BNP Paribas and HSBC, from the U.S. Retail banking sector.
Webster Financial, founded in and headquartered in Connecticut, holds over $80 billion in assets and provides financial services to individuals, families, and businesses primarily in the Northeast. Santander highlighted Webster’s commercial banking presence as a key attraction, complementing its existing strengths.
Santander expects the transaction to be accretive to earnings per share by approximately 7-8% by , with a return on invested capital for Santander of around 15%. The bank also projects its U.S. Efficiency ratio to fall below 40%, placing it among the top three most efficient U.S. Retail and commercial banks. Santander’s Common Equity Tier 1 (CET1) ratio is expected to remain within the 12.8-13% range through and increase to over 13% by .
The transaction is subject to regulatory approvals in both the European Union and the United States and is expected to close in the second half of . Christiana Riley, currently leading Santander in the U.S., will continue as chief executive of Santander USA following the completion of the acquisition.
In , Santander’s U.S. Business contributed €1.5 billion to the group’s global net profit of €14.1 billion, compared to €1.3 billion from the UK and €4.3 billion from Spain. Santander released its fourth-quarter results early on , reporting record profits for the seventh consecutive quarter, with net income rising 7% year-over-year to €3.8 billion, driven by growth in net interest income and fee income.
