Santander To Buy Webster For $12.3B

Banco Santander has agreed to acquire Webster Financial (Webster Bank’s parent) in a cash-and-stock deal valued at about $12.3 billion.

Deal basics

• Buyer: Banco Santander S.A., the Spanish global bank.

• Target: Webster Financial Corporation, holding company for Webster Bank, a regional bank headquartered in Stamford, Connecticut.

• Headline value: Approximately $12.2–$12.3 billion, depending on Santander’s share price.

• Consideration: For each Webster common share, holders are to receive $48.75 in cash plus 2.0548 Santander American Depositary Shares (ADSs).

• Implied price: About $75–$76 per Webster share, a roughly 14–16% premium to Webster’s recent volume‑weighted average price.

Strategic rationale

• Santander gains a much larger U.S. retail and commercial banking footprint, especially in the Northeast, and a strong, low-cost deposit franchise (including Webster’s HSA Bank unit).

• The deal is sized at roughly 4% of Santander’s total assets, fitting its strategy of “bolt‑on” acquisitions to scale in core markets without overextending capital.

• Santander projects U.S. return on tangible equity around 18% by 2028 and over 20% at group level, with group earnings per share accretion of 7–8% by 2028.

Synergies and financial impact

• Expected annual pre‑tax cost synergies of about $800 million, roughly 19% of the combined U.S. cost base.

• Santander estimates a 15%+ return on invested capital from the transaction.

• The bank expects to keep its CET1 capital ratio around 12.8–13% at closing and above 13% by 2027, while still executing a previously announced €5 billion share buyback.

Structure and leadership

• Webster will become a wholly owned subsidiary and its operations will be integrated into Santander’s U.S. platform (Santander Bank N.A. and Santander Holdings USA).

• John Ciulla (Webster CEO) is slated to lead Santander Bank N.A., into which Webster’s businesses will be folded.

• Christiana Riley will remain Santander’s U.S. country head and CEO of Santander Holdings USA.

Timeline and conditions

• The transaction has been unanimously approved by Webster’s board and the relevant Santander bodies.

• Closing is subject to shareholder approvals and regulatory clearances and is expected in the second half of 2026.

The Santander–Webster deal is expected to close in the second half of 2026, assuming all conditions are met.

Expected closing timing

• Both companies state that they expect completion in the second half of 2026, with no more specific month given so far.

• The timing could shift if regulatory reviews, shareholder votes, or integration planning take longer than anticipated.

Key regulatory and other approvals

• U.S. bank regulators: The deal needs approvals from the Federal Reserve and other relevant U.S. banking regulators for the change in control and bank merger.

• EU/European regulators: Because Banco Santander is headquartered in Spain and supervised in the EU, the transaction also requires necessary bank regulatory approvals in the EU.

• Shareholder approvals: Both Webster shareholders and Santander shareholders must approve the merger and share issuance.

• Customary closing conditions: These include effectiveness of SEC filings (like the joint proxy/prospectus), absence of certain adverse changes, and satisfaction of other conditions in the merger agreement.

Main regulatory risks / hurdles

• Scrutiny over creating a top‑ten U.S. retail and commercial bank by assets, which can trigger detailed review of market concentration, fair‑lending compliance, and community impact.

• Possible conditions on branch divestitures, consumer practices, or capital and liquidity planning if regulators see competition or risk-management concerns.

• Longer‑than‑expected review timelines or political/regulatory shifts that could delay or complicate approvals, even if the deal ultimately closes.