Santander Holdings USA, the U.S. subsidiary of Spanish bank Santander, plans to purchase the remaining shares of its U.S. consumer unit for $2.5 billion in an all-cash tender offer, the firms announced Tuesday.
The deal, which includes the remaining 20% of the consumer unit’s shares, values the division at $12.7 billion. The offer price of $41.50 per share represents a premium of approximately 14% to the $36.43 closing price of Santander Consumer's common stock as of July 1, according to a press release.
The deal, which is subject to regulatory approval, is expected to close in the fourth quarter of this year. Boston-based Santander Holdings USA declined to comment on the deal.
The transaction, which has been approved by the board of directors of both Santander Holdings USA and Santander Consumer, comes as the U.S. arm of the Spanish bank has been making efforts to consolidate some of its businesses under tighter control, Reuters reported.
The bank offered in March to buy back an 8.3% stake in its Mexican unit that it did not already own in an attempt to strengthen its Latin American business, according to the wire service. That deal, valued at $648.01 million, is expected to close by this year's third quarter.
The bank’s planned acquisition of the U.S. consumer unit will allow Santander to manage the business by customer segments in line with its U.S. peers, a spokesperson told Reuters. The deal will also have a positive impact on the group's earnings per share and its return on tangible equity ratio, the spokesperson said.
Santander Consumer, which is headquartered in Dallas, is focused on vehicle finance and third-party servicing, and claims to have more than 3.1 million customers across the full credit spectrum.
The unit, which began originating retail installment contracts in 1997, had an average managed asset portfolio of about $64 billion for the quarter ending June 30.