Santander has reached an agreement to acquire Connecticut-based Webster Financial in a transaction valued at $12.2 billion, the Spanish lender said on Tuesday. The takeover will significantly expand Santander’s U.S. presence and put the combined company among the 10 largest retail and commercial banks in the United States by assets.
Under the terms of the offer, Santander will pay $48.75 in cash and 2.0548 of its shares for each Webster share. Santander’s leadership indicated the offer would not be raised. The banks expect the transaction to close in the second half of 2026.
The combined U.S. balance sheet for Santander and Webster is estimated at roughly $327 billion in assets, a scale that the Spanish lender says will help it improve profitability metrics and lower funding costs in the U.S. market. Santander’s executive chair described the acquisition as strategically significant and said it would strengthen the bank’s scale and profitability.
Santander’s U.S.-listed shares fell 6.4% to close at $12.23 following the announcement.
The acquisition continues a multi-year push by Santander to expand in the United States. The group first entered the U.S. in 2005 with the purchase of Sovereign Bank, and it has since become a major participant in auto lending. In 2023, Santander also expanded into corporate and investment banking in the U.S. after bringing on more than 100 staff from the failed Credit Suisse operations.
The bank framed the Webster purchase as part of a deliberate strategy to concentrate resources on the U.S. market. While several European competitors have reduced or sold their U.S. operations over the past decade, Santander said it is doubling down on growth in the country and expects the transaction to move it into the top tier of U.S. retail and commercial banks by asset size.
Regulatory dynamics in the U.S. have shifted recently, the bank noted, and the prospect of greater takeover activity among Wall Street and large regional banks has increased in recent months under the current administration on the expectation that regulators will approve deals that might previously have faced opposition. Independent data referenced by the bank indicate this acquisition would be the largest U.S. banking transaction since October 2025, when a pair of large deals were announced.
Santander said the deal will yield significant cost synergies of about $800 million, roughly 19% of the combined cost base. The bank also set outlooks for profitability tied to the acquisition: it expects to achieve a return-on-tangible-equity in the U.S. of around 18% by 2028, placing it among the top five in profitability within the 25 largest U.S. commercial banks. Santander targets a group-level return-on-tangible-equity above 20% by 2028.
The bank said it will maintain previously announced shareholder remuneration commitments. These include a 5 billion euro share buyback approved on the same day as the Webster announcement, commitments to distribute at least 10 billion euros to shareholders related to 2025 and 2026 results, and a target payout ratio of 50%.
On capital metrics, Santander estimated the group’s common equity tier 1 ratio would be 12.8% on a pro-forma basis after closing the Webster deal, and that the CET1 ratio would be above 13% by 2027.
Advisers to Santander on the transaction included Centerview Partners, Goldman Sachs and Bank of America.
Financial performance context
Earlier on the same day Santander reported results for 2025, recording a net profit of 14.1 billion euros, a 12% increase versus the prior year and a new record for the bank. That figure exceeded analyst forecasts of 13.77 billion euros. Santander’s return-on-tangible-equity after AT-1 capital instruments rose to 16.3%, slightly below its internal target of around 16.5% for the end of 2025.
The bank said it expects group net profit in 2026 - excluding the agreed sale of its Polish business, the acquired TSB unit in Britain, and the Webster transaction - to continue growing beyond the 2025 result. Santander forecast group net profit to increase 14% to 16% in 2027 in constant euros.
During the fourth quarter of 2025, Santander’s net profit rose 15% year-on-year to a record 3.76 billion euros, topping forecasts of 3.44 billion euros. Lending income for 2025, defined as the difference between earnings on loans and deposit costs, fell 2.8% to 45.35 billion euros, slightly above analyst expectations of 45.2 billion euros.
Exchange rate used in the announcement: $1 = 0.8458 euros.