1st Jun 2006 07:00
Banco Santander Central Hispano SA01 June 2006 Press Release SANTANDER COMPLETES THE ACQUISITIONOF 19.8% OF SOVEREIGN BANCORP - Santander has acquired 19.8% of Sovereign for a total investment of $2.395 billion. - The investment is expected to have a positive impact on earnings per share from its inception and will be accounted for by the equity method. Madrid, June 1, 2006 - Grupo Santander has completed the acquisition of 19.8% inSovereign Bancorp. as provided for in the investment agreement announced inOctober 2005, having obtained the necessary approval from the relevantregulatory and supervisory agencies. Under the agreement, Santander has subscribed to a capital increase by Sovereignof $1.931 billion and has bought $464 million in Treasury Stock, at a price of$27 a share in both cases, resulting in a total investment of $2.395 billion(about EUR 1.860 billion), and generating goodwill of $703 million. Sovereignwill use the funds from these purchases, together with the proceeds of theplacement of preferred shares and other funds, to acquire 100% of IndependenceCommunity Bank Corp. (ICBC) of New York for $3.596 billion. As is provided forin the agreement, Santander expects to increase its interest in Sovereign to24.99% through open market purchases. "We are very pleased to complete this investment within the announcedtimetable," said Juan Rodriguez Inciarte, Executive Vice President of Santander."Sovereign has created an excellent regional banking franchise in the U.S.Northeast while also generating value for its shareholders. We believeSantander's investment and the acquisition of Independence Community willcontribute to continuing this long-term creation of value, for Sovereign as wellas for Santander shareholders, employees and customers." The agreement also stipulates that, with certain exceptions, for five years fromthe initial investment, Santander will not raise its stake above 24.99% nor sellit to third parties. Two years from the initial investment, Santander can offerto acquire 100% of Sovereign, according to a procedure set forth in theagreement, or maintain its stake. After five years, Santander may divest thestake. Under the agreement, Santander's voting rights in Sovereign will belimited to 19.99%, unless Santander acquires 100% of Sovereign or Sovereign'snon-Santander shareholders vote to allow Santander to vote all of its shares. Santander will account for its stake in Sovereign through the equity accountingmethod. The investment is expected to have a positive effect on earnings pershare from its inception. As part of this agreement, Sovereign will name Emilio Botin, Chairman ofSantander, and Juan Rodriguez Inciarte, Executive Vice President, as members ofits Board of Directors. Santander has proposed to its Annual General Meeting,scheduled for June 17th, 2006, the appointment of Jay Sidhu, Chief Executive ofSovereign, as a member of the Santander Board of Directors. Santander (SAN.MC, STD.N) is the largest bank in the euro zone and the fourthlargest in Europe by market capitalization. Founded in 1857, Santander has EUR809 billion in assets and EUR 961 billion in managed funds, more than 66 millioncustomers, 129,000 employees, and 10,200 offices in 40 countries. It is thelargest financial group in Spain and Latin America, and has significant marketpositions elsewhere in Europe, including the United Kingdom through its Abbeysubsidiary and Portugal, where it is the third largest bank. Through SantanderConsumer Finance, it also operates a leading consumer finance franchise inGermany, Italy, Spain and nine other European countries. In 2005, Santanderrecorded EUR 6.22 billion in net profit, up 72.5% from the previous year. Formore information on Santander, visit www.gruposantander.com. Sovereign Bancorp, Inc., ("Sovereign") (NYSE: SOV), is the parent company ofSovereign Bank, a pro forma $83 billion financial institution with nearly 800community banking offices, over 2,000 ATMs and approximately 12,000 team memberswith principal markets in the Northeast United States after giving effect to theIndependence acquisition and recently announced branding agreement in whichSovereign ATMs will be placed in CVS/pharmacy locations. Sovereign offers abroad array of financial services and products including retail banking,business and corporate banking, cash management, capital markets, wealthmanagement and insurance. Sovereign is the 18th largest banking institution inthe United States. For more information on Sovereign Bank, visit or call 1-877-SOV-BANK. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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