MADRID: Santander's US business is to buy the minority stake in its U.S. consumer unit it does not already own for around $2.5 billion, slightly more than it agreed to pay in July. The deal values the entire Santander Consumer U.S. unit at $12.7 billion, Santander said in a statement.
The offer of $41.5 per share to buy out the stake of around 20% represents an increase of 6.4% from the $39 per share or $2.36 billion it originally offered to pay. Santander Holdings USA (SHUSA) said Tuesday's offer price represents a premium of about 14% to the company's close on July 1, when the deal was first announced.
Santander also said it had appointed Ashwani Aggarwal as its chief risk officer to oversee SHUSA and the Santander U.S. businesses. The buyout comes at a moment when the US economy is in full-swing recovery mode and follows solid earnings by Santander in the United States.
Shares in Santander were down 0.9% at 1223 GMT compared to a fall of 0.6% for the Dow Jones banking European index. Santander recently offered to buy the 8.3% stake in its Mexican unit that it did not already own as part of its strategy to expand in emerging economies which it hopes will deliver faster growth than its core markets in Europe.
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