Banco Santander SA, Spain's largest bank, won Federal Reserve Board approval Wednesday to buy the Philadelphia thrift company Sovereign Bancorp Inc., which has been hurt by the collapse of global credit markets.

Sovereign agreed in October to sell itself to Santander for $1.9 billion after customers withdrew 9% of deposits in the third quarter.

Sovereign blamed the $4.2 billion in withdrawals on "intense deposit competition as well as general safety and soundness concerns" after the collapse of another thrift company, IndyMac Bancorp Inc. of Pasadena, Calif. Regulators seized IndyMac on July 11 after customers pulled more than $1.3 billion of deposits.

Santander said last month that it would offer Sovereign investors 0.3206 of its American Depository Shares for each of their shares, equal to $2.82 for each share of Sovereign based on Santander's $8.80-a-share price at 11:43 a.m. in New York Stock Exchange composite trading.

Santander, which agreed to buy Sovereign for about $3.81 a share, had said it would offer 0.2924 American Depository Shares, Sovereign said on Nov. 17.

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