Banco Santander, Sovereign Bancorp merger approved by Fed

By Lisa Kerner

Charlotte, N.C., Dec. 10 - The Federal Reserve Board announced its approval of the proposed acquisition of Sovereign Bancorp, Inc. by Banco Santander, SA.

On Oct. 13, Banco Santander, a Madrid-based bank, agreed to acquire Sovereign in a stock-for-stock transaction valued at $1.9 billion.

It was previously reported that Sovereign planned to adjust the exchange ratio received by its shareholders upon completion of the rights offering in which Banco Santander plans to sell 1.6 billion newly issued shares.

Following the adjustment, Sovereign common shareholders will receive 0.3206 Santander American Depositary Shares per share of Sovereign common stock.

The adjustment is in accordance with the agreement, which provides for an exchange ratio of 0.2924 ADSs per Sovereign share and makes adjustments to the exchange ratio for events such as the rights offering.

Sovereign is a Philadelphia-based bank holding company.

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