Davis Polk & Wardwell is advising Banco Santander, S.A. on its acquisition of Sovereign Bancorp, Inc., the parent company of Sovereign Bank. Santander currently owns 24.35% of Sovereign's outstanding shares.

Under the terms of the definitive transaction agreement, Sovereign shareholders will receive 0.2924 Banco Santander American Depository Shares (ADSs) for every 1 share of Sovereign common stock they own (or 1 Banco Santander ADS for 3.42 Sovereign shares). Based on the closing stock price for Santander ADSs on Friday, October 10, 2008, the transaction has an aggregate value of approximately US$1.9 billion, or US$3.81 per Sovereign share. The transaction is subject to customary closing conditions, including necessary bank regulatory approvals in the US and Spain and approval by both companies’ shareholders.

The Davis Polk corporate team includes partners Diane G. Kerr and Joseph Rinaldi and associates Aly El Hamamsy, Ashleigh S. Kyle, Scott D. Mitnick, David L. Portilla, Kyle M. Vaughn, Melissa Glass (not yet admitted), John Naughton and Phoebe Nel (not yet admitted). Partner Arthur S. Long and associate Sonia L.R. Garner are providing financial regulatory advice. Partner Edmond T. FitzGerald and associates Ron M. Aizen and Gillian Emmett Moldowan are providing employee benefits advice. Partner Michael Mollerus and associate Joshua Ruland are providing tax advice. Counsel Susan D. Kennedy and associate Lucie E. Shin are providing real estate advice. Partner Gail A. Flesher is providing environmental advice. Austin D. Brown is the legal assistant on the transaction. All members of the Davis Polk team are based in the New York office.