Erste Group bank acquires major stake in Santander's Polish unit for €6.8 billion

In early May 2025, Austria's Erste Group Bank announced its acquisition of a 49% stake in Santander's Polish unit for around 6.8 billion euros, equivalent to $7.7 billion. This significant transaction was confirmed by both Santander and Erste during a press release, highlighting Erste's commitment to expanding its influence in the Polish banking sector. Following this announcement, shares in Santander Bank Polska experienced a notable decline of approximately 5% in the Warsaw market, reflecting investor sentiment connected to the purchase. In conjunction with the stake acquisition, Erste Group Bank also agreed to acquire 50% of Santander's Polish asset management business for 200 million euros. Erste stated that the funding for these acquisitions would be sourced exclusively from internal resources. Notably, Erste's shares surged by 6.46% in the market, while Santander's shares saw a modest increase of 0.3% by 8:30 GMT. Santander Group, recognized as the largest lender in the eurozone by market capitalization, expressed intentions to utilize a portion of the funds generated from the sale to support organic growth initiatives across Europe and the Americas. Additionally, both banking entities revealed a strategic collaboration in the realm of Corporate & Investment Banking (CIB), which would grant Erste access to Santander's comprehensive global payments platforms. The transaction, valued at 584 zlotys ($155) per share, positioned Santander Bank Polska at 2.2 times its first quarter 2025 tangible book value per share, totaling approximately 13.88 billion euros. Given Polish takeover regulations, Erste Group Bank is not mandated to issue a mandatory takeover offer since its shareholding remains below the 50% threshold. Santander, the third-largest bank in Poland by assets and one of the market's most profitable institutions, intends to distribute 50% of the capital released from this sale to its shareholders once finalized, resulting in a share buyback worth around 3.2 billion euros. This distribution plan aims to expedite Santander's goal of achieving a targeted share buyback of up to 10 billion euros over the next two years. To facilitate its acquisition funding, Erste Group Bank has also prioritized the cancellation of a 700-million euro share buyback program and revised its dividend payout ratio alongside various balance sheet optimization strategies.