Banco Santander has agreed to sell approximately 49% of the capital of Santander Polska, its Polish subsidiary, for 6,800 million euros, to the Austrian group Erste Bank, as well as 50% of its asset management business in Poland (TFI) that Santander Polska does not control for about 200 million euros, making the total amount of the deal with Erste close to 7,000 million euros.
The all-cash deal will be executed at a price of 584 zlotys per share (136.5 euros), valuing the bank at 2.2 times its tangible book value per share at the end of the first quarter of 2025, excluding the announced dividend of 46.37 zlotys (10.84 euros) per share, and at 11 times the 2024 earnings.
Santander has highlighted that this price also represents a 7.5% premium over the closing market price of Santander Polska on May 2, excluding the dividend, and a 14% premium over the volume-weighted average price of the last six months. Santander Polska's shares will trade ex-dividend on May 12.
Following the transaction, Santander will hold approximately 13% of Santander Polska's capital and intends to acquire the entirety of Santander Consumer Bank Polska before the closing by purchasing the 60% currently held by its Polish subsidiary.
The closing of these deals, expected around the end of 2025, will generate an approximate net gain of 2,000 million euros for Santander, resulting in an increase of about 100 basis points in the group's CET1 capital ratio, equivalent to around 6,400 million euros, and positioning the pro forma CET1 capital ratio at around 14%.
In addition to the acquisition, Santander and Erste have announced a strategic collaboration to leverage both entities' capabilities in Corporate & Investment Banking (CIB), and to allow Erste access to Santander's global payment platforms, "in line with the group's strategy to become the world's best open financial services platform," stated the entity, which will connect Erste's clients with its global product platforms in the UK, Europe, and America.
In payments, the entities will explore opportunities for Erste, including Santander Polska after the deal closes, enabling it to leverage Santander's capabilities and infrastructure in this area, including its payment business PagoNxt.
Santander plans to distribute 50% of the capital freed up by this deal through a share buyback of approximately 3,200 million euros.
According to the entity, this will accelerate the achievement of the goal of up to 10,000 million euros in share buybacks from the results of 2025 and 2026 and the expected excess capital.
"Therefore, the previously announced target could be exceeded, given the attractiveness of buybacks at current valuations, subject to regulatory approval," the bank emphasizes.