Spain's Santander bank said Monday it had made a deal to buy 100 per cent of the British bank Alliance & Leicester for 1.57 billion euros (2.5 billion dollars), according to dpa. The transaction will be carried out through a share swap, with Santander exchanging one of its shares for every three shares of Alliance & Leicester, Santander told the Spanish market regulator CNMV. The swap values the combined company at 299 pence (5.95 dollars) per share. Santander will extend its capital by 2 per cent for the operation. Alliance & Leicester will be integrated into Santander's British subsidiary Abbey, which the Spanish bank acquired in 2004. The operation was expected to be completed in October after getting the green light from shareholders. Santander president Emilio Botin described the deal as a "significant step" towards expanding his bank's activities in Britain. The consolidated firm would have almost 1,000 branches in Britain. Finding itself in difficulties due to the international credit crisis, Alliance & Leicester saw the value of its shares sink continually, as the bank booked write-offs of 400 million pounds (795 million dollars). Shares of the British bank, already rising at the prospect of a Santander takeover, took off Monday by 48.35 per cent to 325.25 pence. Unions expect that the new company will lay off a large number of its nearly 8,000 employees.
