Banco Santander inks $12.3B deal to buy Webster Financial

• Key insight: Banco Santander announced Tuesday that it's buying Connecticut-based Webster Financial in a cash-and-stock transaction valued at $12.3 billion. 
  
• What's at stake: Santander, which has been seeking low-cost deposits in the U.S., is poised to get a boost in that area by acquiring Webster, which has a stable and diverse deposit base.
  
• Forward look: The deal is expected to close during the second half of 2026.

The Spanish banking giant Banco Santander , which has been trying to grow its U.S. franchise, plans to acquire Webster Financial in Stamford, Connecticut, in a deal valued at $12.3 billion.

The pending cash-and-stock transaction is expected to close during the second half of this year, the two banks announced Tuesday in separate press releases. Christiana Riley, who has been Santander's U.S. country head for the past year, will remain in that role. John Ciulla, Webster's chairman and CEO, will become CEO of Santander Bank N.A.

The combined entity will have $327 billion of assets, $185 billion of loans and $172 billion of deposits, Santander said in its release. Webster's headquarters in Stamford will be a corporate office for Santander, along with its existing offices in Boston, New York, Miami and Dallas.

The deal is a major play for Santander, which entered the U.S. in 2005 when it acquired a partial stake in Sovereign Bank in Philadelphia. Known largely for being a consumer finance lender, Santander has been seeking low-cost deposits to help fund its sizable auto loan book.

It launched a nationwide digital bank, called Openbank, in the fall of 2024 as part of that effort. Under Riley's leadership, it has been focused on increasing its U.S. revenues and profitability.

The acquisition of Webster "is a significant step forward in strengthening our commercial banking presence and filling in our retail branch footprint and scale, particularly in Connecticut where we are committed to maintaining a broad branch presence," Riley said in a written statement. "The acquisition meaningfully expands our commercial franchise, resulting in a more balanced business mix and positioning us for sustainable, long-term growth."

Webster, which had more than $84 billion of assets as of Dec. 31, operates about 195 branches in three states: its home base in Connecticut as well as Massachusetts and Rhode Island. The bank has a stable and diverse deposit portfolio that includes a consumer bank, a commercial bank and a health-savings accounts business.

The deal should deliver cost savings of approximately $800 million, Santander said.

After the acquisition closes, Luis Massiani, Webster's president and chief operating officer, will serve as COO of Santander Holdings USA and Santander Bank N.A., Santander said. Massiani will report to Riley and Ciulla, and is on deck to lead the integration, the bank said.

The proposed tie-up is the largest bank merger-and-acquisition deal by asset size and by deal value in five years, Laurie Havener Hunsicker, an analyst at Seaport Research, told American Banker Tuesday.

"M&A has returned," she said, noting that the pickup is largely due to fewer regulatory burdens and faster closing timelines.

Bank consolidation activity slowed down from between 2022 and 2024 amid a challenging interest rate environment and a less-merger friendly regulatory regime.

But dealmaking sprang to life in 2025, when more than 170 bank transactions were announced.

Last year's largest acquisition by deal value, Cincinnati-based Fifth Third Bancorp's $10.9 billion purchase of Comerica in Dallas, closed on Sunday, less than four months after it was announced.

Unlike several other European banks that have exited the U.S. in recent years, Banco Santander has doubled down on investing in and expanding its stateside operations.

Catherine Leffert contributed to this article.