Published by Global Banking & Finance Review®
Posted on February 4, 2026
3 min readLast updated: February 4, 2026
Add as preferred source on GoogleSantander shares fell 5% after announcing a $12.2B acquisition of Webster Financial, with analysts noting execution risks but strategic benefits.
By Jesús Aguado
MADRID, Feb 4 (Reuters) - Santander's acquisition of U.S. Webster Financial reflects Chairman Ana Botin's ambition for the Spanish bank to become a significant player in U.S. retail banking, a move that some analysts warn carries execution risks.
Botin, who has maintained Santander's focus on the U.S. despite more modest profitability there, told analysts that competing on the global stage requires a strong U.S. footprint.
"Being one of the most profitable banks in our core geographies is a key target for Santander, and the Webster acquisition gets us there. Webster provides this final step change that we needed in the U.S.," Botin said on Tuesday.
German Lopez, professor of banking at Spain's IESE business school, noted that Santander's commitment to U.S. expansion is likely to continue in the long run. However, Botin has stated there are no plans for additional acquisitions over the next three years.
"Santander has a global presence (in ten core markets), but she (Botin) believes that having a significant presence in the United States is very important for the group's value and reputation," Lopez said.
Unlike Spanish competitor BBVA, which sold its U.S. retail bank Compass in late 2020, Santander has prioritized U.S. growth.
"In the U.S., either you gain scale to achieve profitability that contributes to the group, or you leave the country," Lopez added.
Barclays analysts indicated that the Webster deal would accelerate Santander's U.S. return-on-tangible-equity ratio (ROTE), a key measure of profitability, to approximately 18% by 2028 from the current 10.8%. The acquisition will also enable Santander to rebalance its credit portfolio toward health services and middle-market lending in the U.S. Northeast.
Botin's strategy aims to position Santander among the 10 largest retail and commercial banks in the U.S. by assets, with a combined U.S. balance sheet of about $327 billion. This would reduce the bank's reliance on emerging markets.
CONCERNS OVER EXECUTION AND COSTS
The deal did not come without some concerns. Barclays highlighted a perceived shift from previous messaging favouring organic growth and share buybacks over acquisitions in the U.S.
Santander shares fell 2.4% as of 0129 GMT on Tuesday, having gained 125% last year.
Santander estimates cost savings of about $800 million by 2028 as a result of the deal. Morgan Stanley suggested these savings, representing 55% of Webster's cost base or 19% of the combined entity, might involve revenue attrition risks. Jefferies, however, argued that the synergies would align with previous deals in the sector.
Santander's offer of $75 per Webster share, consisting of $48.75 in cash and 2.0548 Santander shares per Webster share, represents a 14% premium to Webster's three-day volume-weighted average price of $65.75. Webster shares rose 9% to $71.95 on Tuesday following the announcement.
The deal structure, with 65% funded in cash and 35% in new shares, implies a capital increase of around 3.5 billion euros. Jefferies estimated the capital impact at 140 basis points, which it deemed "manageable."
On Wednesday, Santander announced a 5 billion euro share buyback as part of its shareholder remuneration policy.
(Reporting by Jesús AguadoAdditional reporting by Emma PinedoEditing by Elaine Hardcastle)
An acquisition is a corporate action in which one company purchases most or all of another company's shares to gain control of that company.
Return on tangible equity (ROTE) is a financial metric used to measure a company's profitability by comparing its net income to its tangible equity.
Cost synergies refer to the savings that are expected to be achieved when two companies merge or one acquires another, typically through reduced operational costs.
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