Jamie Spencer
Introduction
Austrian lender Erste Group Bank (ERST.VI) is in discussions with Spain’s Banco Santander (SAN.MC) regarding a potential deal to acquire a 49% stake in Santander’s Polish unit, a transaction that could be valued at over $8 billion. While the discussions are ongoing, both banks have emphasized that no final agreement has been reached yet, and there is no certainty that the deal will materialize.
Details of the Potential Deal
Santander currently holds a 62% stake in Santander Bank Polska, which is worth approximately 39.4 billion Polish zloty ($10.5 billion) according to LSEG data. The Spanish bank has been exploring options for this stake, including a possible divestment, with discussions coming amid rising speculation about the future of Santander’s Polish operations.
Under Polish takeover law, any party acquiring less than 50% of the votes in a target company does not need to make a mandatory takeover offer. This provides Erste Group with the opportunity to purchase a significant minority stake in the Polish unit without triggering the requirement for a full takeover bid, as noted by law firm Baker McKenzie.
Market Reaction and Stock Impact
Erste Group’s stock saw a sharp decline of more than 4% following the news of the discussions. Meanwhile, shares of Santander’s Polish unit also dropped by 2.2%, following a period of rising stock prices, fueled by earlier reports indicating that Santander was considering its options for its Polish business.
The stock movement reflects the uncertainty in the market regarding the potential outcome of the talks, as investors closely watch the negotiations unfold. The news also highlights the ongoing shifts in the European banking sector, with major players such as Santander and Erste Group strategically adjusting their portfolios to align with broader market trends.
Santander’s Strategic Review and Global Expansion Plans
The potential sale of Santander Bank Polska comes at a time when the Spanish banking giant is expanding its footprint in the U.S., particularly in corporate and investment banking, as well as in the digital banking space through its digital offering, Openbank. The move also comes amid a regular assessment of Santander’s presence in major markets, including its ongoing review of its operations in the UK, a source familiar with the matter told Reuters in January.
In 2024, Santander’s Polish business saw a strong performance, with net profits rising 18.8% to 800 million euros ($909 million), contributing significantly to the bank’s overall profitability. Despite this growth, Santander sold a 5.2% stake in its Polish unit last September, indicating its openness to strategic restructuring.
Conclusion
The discussions between Erste Group Bank and Santander reflect broader trends in European banking, where major institutions are reevaluating their holdings and considering strategic divestitures. Whether or not the deal between Erste and Santander will go through remains uncertain, but the ongoing negotiations mark an important development in the regional banking landscape.
