Banco Santander has agreed to sell about 49% of its shares in its Polish banking business, Santander Polska, to Austrian bank Erste Group for €6.8bn($7.7bn).
In addition, Erste will acquire 50% of Santander Polska’s asset management business (TFI) not currently owned by the bank for €0.2bn, bringing the total value of the all-cash transaction to €7bn($7.9m).
The transaction is expected to close by the end of 2025, contingent upon customary conditions and regulatory approval.
Santander will retain around 13% of Santander Polska and plans to fully acquire Santander Consumer Bank Polska by purchasing the remaining 60% stake from Santander Polska before closing.
The agreed transaction price is 584 zlotys per share, representing a 7.5% premium to Santander Polska’s 2 May 2025 closing price.
Erste will fund the all-cash purchase entirely with “internal resources”, by cancelling its planned €700m share buyback and temporarily reducing its dividend payments.
Santander expects to make a €2bn net capital gain from the sale.
Alongside the equity transaction, Santander and Erste have agreed to enter a strategic cooperation covering Corporate & Investment Banking (CIB) and payment services.
The collaboration will include a referral-based model allowing the institutions to leverage their respective regional strengths, offering localised solutions and market insights to corporate and institutional clients.
Santander will also provide Erste’s clients with access to its global CIB platforms across the UK, Europe, and the Americas.
In the area of payments, the two banks intend to explore opportunities for Erste to utilise Santander’s payment infrastructure, including services offered by Santander’s PagoNxt platform, with the potential to expand access to Santander Polska post-transaction.
Following the transaction, Banco Santander aims to return part of the capital to shareholders.
It intends to distribute approximately €3.2bn via share buybacks, equivalent to 50% of the capital released.
This would contribute to the group’s broader buyback goal of up to €10bn from 2025 and 2026 earnings and surplus capital, with the possibility of exceeding that target depending on market conditions and regulatory approval.
The bank anticipates the deal will be earnings per share accretive by 2027–2028, through a combination of organic growth, share repurchases, and selective acquisitions aligned with its strategic and return criteria.
Banco Santander executive chair Ana Botín stated: “This transaction is another key step in our strategic focus on shareholder value creation which is based on both accelerating our platform strategy through ONE Transformation and growing the group’s scale in geographies with highly connected markets.