(Updated, 12:35 p.m.)
PHILADELPHIA – Banco Santander S.A., the Spanish banking giant that bought Sovereign Bancorp last year, is mulling whether to merge Sovereign with a New York-based lender to expand its U.S. presence.
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The Financial Times reported Wednesday talks between Santander and M&T Bank Corp. had stalled after reaching an advanced stage because of disagreements about who would control the enlarged bank.
Anonymous sources told the FT the proposed agreement would see Buffalo, N.Y.-based M&T merge with Sovereign in an all-stock deal. Santander and M&T declined to comment.
Separately, The Wall Street Journal also reported Wednesday that weeks of recent talks between M&T and Santander had reached an advanced stage before collapsing.
The Journal’s sources described a somewhat different plan, which would have seen M&T buy Sovereign from Santander, with Santander then taking a stake in the larger M&T with the purchase of Allied Irish Banks Plc’s 22.5 percent share of the New York bank.
A tie-up between M&T and Sovereign would be a major regional bank in the Northeast and Mid-Atlantic. Sovereign’s 750 branches and 2,300 ATMs stretch from Maine to Maryland, while M&T has locations in New Jersey, Pennsylvania, Maryland, and Washington, D.C., in addition to its base around Buffalo.
M&T’s largest shareholders including Warren Buffett’s Berkshire Hathaway Inc.
Last fall, Santander CEO Alfredo Sáenz said the company would consider buying a midsize U.S. bank if it saw the right opportunity, although it still needed time to finish restructuring Sovereign.
Additional information is available at santander.com.
