Was the Santander/Abbey National Take over Successful?

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  • Topic: Grupo Santander, Bradford & Bingley, Alliance & Leicester
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  • Published : April 5, 2012
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Santander/Abbey National

Buyer: Banco Santander
* Spanish.
* Largest bank in the Eurozone
* Operations throughout Europe, Latin America, and the USA * World’s largest network of branches
* 90 million customers

Target: Abbey National
* British PLC, former building society.
* Share price of Abbey National declined slowly over 4 years, partly due to a disastrous investment in wholesale loans. A major reorganisation of the business was announced in 2003.

Year| July 2004|
Integration| Horizontal|
Geography| Cross-Border|
Value| £8 BN|
Deal Type| Takeover|

More recently Santander bought Alliance & Leicester (£1.3 Billion) and Bradford & Bingley (£612 million) >>> greater Synergy, Santander is aiming to save £180 million from integrating the three businesses. Cross-Border deals now account for 25% of all M&A’s

Quotes:

‘The purchase of Abbey will create value for Grupo Santander Shareholders and at the same time benefit our customers and employees’ * Santander’s chairman, Emilio Botin

‘Santander will build on our heritage, and provide the support and know how to accelerate our plans and ambitions in the UK. Under Santander’s ownership, Abbey will emerge as a stronger, more competitive force on the high street. * Abbey’s Chairman, Lord Burns

‘I believe this offer represents incredible bad value for shareholders.’ * Anto Nolan, Shareholder

BP.1 Merger Motives

The Abbey takeover created the first bank in the Eurozone by market capitilization. Banco Santander saw the acquisition as an attempt to:

* Diversify and expand its business portfolio. Made Santander a global player with a diversified business portfolio both geographically and by business. * Enter the UK banking market. Europe’s largest and most profitable one (even if the most competitive) Santander wanted to build on Abbey’s existing presence and increase its market share. * Create value...
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