Banco Santander is expanding its U.S. Footprint with the acquisition of Webster Financial Corporation for $12.2 billion, a move that will create a top-ten retail and commercial bank in the United States by assets. The deal, announced on , aims to strengthen Santander’s commercial banking presence and broaden its retail reach, particularly in the Northeast.
Strategic Rationale and Financial Details
The acquisition will result in a combined entity with total assets of $327 billion, $185 billion in loans and $172 billion in deposits, according to Santander. The Spanish banking giant anticipates achieving an 18% return on tangible equity (RoTE) in the U.S. By 2028 as a result of the merger. 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.
Webster shareholders are set to receive $48.75 per share in cash, along with 2.0548 Santander shares in the form of American Depositary Shares per Webster share. This equates to a total consideration of $75 per Webster share, based on Santander’s three-day volume-weighted average price. Santander expects the deal to generate an approximate 15% return on invested capital and contribute to 7-8% earnings per share accretion by 2028.
Strengthening Presence in Key Markets
The combined business will establish a top-five deposit franchise across key states in the U.S. Northeast. Santander highlighted the complementary nature of its business with Webster’s, aiming to enhance service offerings for customers of both institutions. The acquisition is expected to create a more balanced business mix for Santander, improving its funding mix and lowering funding costs.
Christiana Riley, CEO of Santander US, emphasized the strategic importance of the deal, stating, “This acquisition is a significant step forward in strengthening our commercial banking presence and filling in our retail branch footprint and scale, particularly in Connecticut, where we are committed to maintaining a broad branch presence.” She further noted that the acquisition will position Santander for “sustainable, long-term growth.”
Leadership Perspectives and Transaction Timeline
John R. Ciulla, chairman and CEO of Webster Financial Corporation, expressed optimism about the future, stating that the transaction will create “an even stronger partner for Webster Bank’s clients.” He believes the larger organization will unlock greater scale, broader capabilities, and new opportunities for growth while maintaining a focus on client relationships. Ciulla will be joining the Santander team following the completion of the merger.
The transaction is subject to customary closing conditions and is expected to finalize in the second half of . Santander anticipates its Common Equity Tier 1 (CET1) ratio will remain within the 12.8-13% range by the end of , increasing to over 13% by .
Recent Digital Investments and Strategic Divestitures
Santander has been actively investing in its digital capabilities in the U.S. Its digital banking platform, Openbank by Santander, gained over 100,000 customers in its first six months of operation, exceeding the bank’s expectations. This growth underscores Santander’s commitment to expanding its digital presence in the U.S. Market.
Concurrently, Santander has been streamlining its global portfolio. In May , the bank sold a majority stake in its Polish business to Erste Group for $7.9 billion, demonstrating a strategic focus on core markets and efficient capital allocation.
Implications for the U.S. Banking Landscape
The acquisition of Webster Financial by Santander represents a significant consolidation in the U.S. Banking sector. The creation of a top-ten bank by assets will increase competition in the retail and commercial banking space, particularly in the Northeast. The deal also highlights the continued interest of international banks in expanding their presence in the U.S. Market, drawn by the potential for growth and profitability.
Ana Botín, executive chair of Banco Santander, described the acquisition as “an exciting step forward” that will create a stronger bank for customers and improve the group’s overall profitability. She emphasized that the deal remains a “bolt-on” acquisition, meaning it is designed to complement and enhance Santander’s existing operations rather than fundamentally alter its overall strategy.
