Santander has announced that it has agreed to buy the British bank Alliance and Leicester for £1.26 billion. Whilst the deal still needs clearance from British and Spanish regulators, Spain’s largest bank have agreed an all share deal whereby the bank is offering one of its shares for every three shares in Alliance and Leicester. The deal values the British lender at 299 pence a share, over a third above its closing price at the end of last week. The 18 pence interim dividend received by shareholders from Alliance and Leicester takes the total value for shareholders to 317 pence.
Santander intends to merge Alliance and Leicester with Abbey National, which it acquired in 2004 for £9.2 billion. Such a merger will result in pre-tax savings of over £180 million for Santander if it is successful in buying A&L, though there will also be hefty job cuts as part of the merger.
Santander is continuing to strengthen despite the impact of the credit crunch. Whereas A&L has been hit significantly by the economic climate, Santander’s operations in Latin America helped it to post a record profit of €9.03 last year.
Santander Agrees to Buy British Bank
Financial Services > e-banking > Banking news
Santander Agrees to Buy British Bank
Wed, 16 Jul 2008
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