Santander's $12.3B Webster deal reverses CT branch closures

Banco Santander’s $12.3 billion acquisition of Webster Financial would dramatically expand the Spanish bank’s Connecticut footprint after years of reducing its presence in the state. The deal, announced Tuesday, would give Santander control of Webster’s 177 branches across the Northeast, including a substantial network throughout Connecticut anchored by the bank’s Stamford headquarters at 200 Elm Street.

The acquisition marks a sharp reversal for Santander, which has steadily closed Connecticut branches over the past five years as part of a broader industry trend toward digital banking. The bank shuttered locations in Norwalk, Bridgeport, and New Haven, reducing its Connecticut presence to roughly 40 branches by 2023.

“This transaction transforms our regional banking strategy and gives us the scale we need to compete effectively in key Northeast markets,” Santander CEO Ana Botín said in a statement. The deal values Webster at $54.84 per share, representing a 23% premium to Monday’s closing price.

Webster Financial, founded in 1935, operates primarily across Connecticut, Massachusetts, Rhode Island, and New York. The Stamford-based bank has maintained a strong presence along the I-95 corridor, with branches in Greenwich, Darien, Westport, and other affluent Fairfield County communities that serve as bedroom communities for New York City commuters.

The transaction would create the fifth-largest regional bank in the Northeast by assets, with approximately $85 billion in combined deposits. For Connecticut, the deal represents a rare expansion of banking services after years of consolidation that has reduced consumer choice.

“Connecticut has lost significant banking capacity over the past decade,” said Thomas Mongellow, a banking analyst at Keefe, Bruyette & Woods. “This merger actually adds resources rather than eliminating them, which is unusual in today’s market.”

Webster’s commercial lending focus aligns with Santander’s strategy to capture more business from Connecticut’s robust finance and insurance sectors. The state houses major employers including Aetna, Travelers, and numerous hedge funds concentrated in Fairfield County.

Regulatory approval could take 12 to 18 months, with the Federal Reserve and Office of the Comptroller of the Currency expected to scrutinize the deal’s impact on regional competition. Both banks must also satisfy Community Reinvestment Act requirements, particularly regarding lending in underserved areas of Bridgeport and Hartford.

Webster shares jumped 19% in early trading Tuesday, while Santander’s Madrid-listed stock gained 3.2%. The deal is expected to close in the fourth quarter of 2026, subject to regulatory and shareholder approvals.