Santander has agreed to acquire Webster Financial Corporation in a transaction valuing the US bank at USD 12.2 billion.
The Spain-based banking group announced that it will purchase Webster Financial, the holding company for Webster Bank, in a cash-and-stock deal. The acquisition will combine Santander's US consumer finance operations with Webster's commercial banking and deposit franchise in the Northeastern United States.
Transaction structure and valuation
Under the agreement, Webster shareholders will receive USD 48.75 in cash and 2.0548 Santander shares in the form of American Depositary Shares per Webster share. Based on Santander's three-day volume-weighted average price of EUR 10.79 per share ending 2 February 2026 and an exchange rate of 1.1840, the share component represents USD 26.25 per Webster share, bringing total consideration to USD 75.00 per share.
The offer represents a 14% premium to Webster's three-day volume-weighted average share price of USD 65.75 ending 2 February 2026. The consideration mix comprises 65% cash and 35% newly issued Santander shares. The transaction values Webster at 10 times consensus 2028 earnings, or 6.8 times after projected cost savings.
The combined entity will create a US banking operation with approximately USD 327 billion in assets, USD 185 billion in loans, and USD 172 billion in deposits based on figures as of 31 December 2025. Following completion, Santander will rank among the ten largest retail and commercial banks in the US by assets.
Financial projections and synergies
Santander expects the transaction to generate approximately USD 800 million in annual cost synergies, equivalent to roughly 19% of the combined cost base. The bank projects its US efficiency ratio will improve to below 40% by 2028.
The acquisition is expected to deliver a return on invested capital of approximately 15% for Santander and contribute 7% to 8% earnings per share accretion by 2028. Santander forecasts an 18% return on tangible equity for its US operations by 2028, supported by scale benefits, cost synergies, and improved funding structure.
Santander's Common Equity Tier 1 ratio is projected at 12.8% post-closing, maintaining levels at the upper end of the bank's 12% to 13% operating range. The group expects the ratio to exceed 13% by 2027 whilst maintaining existing share buyback commitments. The transaction will be funded through excess capital and future capital generation.
Strategic rationale and market positioning
Webster operates across consumer, commercial, and healthcare financial services with a focus on affluent markets and middle-market lending in the Northeastern US. The bank's deposit base is positioned to improve Santander's combined net loan-to-deposit ratio from 109% to approximately 100%.
Santander has identified deposit gathering as a strategic priority for its US operations, recently deploying its digital bank Openbank to support lending businesses. Webster's funding costs are expected to reduce the combined entity's overall cost of funding.
The transaction requires regulatory approvals and shareholder approval from both Webster and Santander. Closing is expected during the second half of 2026. Until completion, both banks will operate independently with no changes to customer accounts, branch access, or service delivery.
Centerview Partners, Goldman Sachs, and Bank of America Europe are serving as financial advisers to Santander. Davis Polk & Wardwell is the US legal adviser and Uría Menéndez is Spanish legal adviser.
