The Santander Bank Finalizes Purchase of Sovereign Bancorp

Santander Bank is holding “advanced conversations” in order to acquire ownership of the United States banking group Sovereign Bancorp. The deal could close this very Monday, according to The Wall Street Journal.

The United States newspaper, which cites as sources people involved in the transaction, says that the group is worth about 2.53 billion dollars, giving a price of $3.81 per share of stock.

Santander already owns 25% of Sovereign Bank, the affiliated bank group with its headquarters in Philadelphia.

The Spanish bank acquired 20% of Sovereign in October of 2005 for about 2.4 billion dollars, in a deal that assured its entry into the United States market with its eye on Hispanics.

Sovereign Bank, with a sizeable presence in the northeast United States, has 750 branches and about 12,000 employees.

Sovereign has been affected by the latest worldwide credit crisis, especially following its entry into the automobile loan market. The market is known for its heavy competition in prices.

This past January, the bank eliminated its dividend after announcing annual losses of 1.3 billion dollars (841 million euros), after losing 1.602 billion dollars (1.036 billion euros) in the fourth quarter.

Santander Bank, the most prominent bank in Spain dealing with stocks, and one of the ten most important in the world, has, in the midst of this economic crisis, bought up the British firm of Bradford and Begley, and was revealed in the U.S. press to be a possible purchaser of the United States’ Wachovia, which was ultimately purchased by Wells Fargo of San Francisco.