MADRID/VIENNA, May 5, 2025 — Austria’s Erste Group Bank said Monday it will acquire a 49% stake in Santander’s Polish unit for approximately 6.8 billion euros ($7.7 billion), a deal that sent shares in Santander Bank Polska down about 5% on the Warsaw Stock Exchange.

The transaction values the Polish lender at 13.88 billion euros, or 2.2 times its first-quarter 2025 tangible book value per share. Erste is paying 584 zlotys ($155) per share in cash, fully funded from its internal resources.

Erste also reached a separate agreement to acquire 50% of Santander’s Polish asset management business for 200 million euros. Both banks announced a broader strategic partnership covering corporate and investment banking, as well as access to Santander’s global payments platforms.

Erste’s stock jumped 6.46% by 0830 GMT, while Santander’s shares rose 0.3%.

The acquisition, which remains below the 50% voting threshold, avoids triggering a mandatory takeover offer under Polish law. Santander Bank Polska ranks as Poland’s third-largest bank by assets and is among the most profitable, benefiting from an extended period of high interest rates — in contrast with the eurozone, where the European Central Bank is leaning toward easing.

Santander, the euro area’s largest lender by market capitalization, plans to use part of the sale proceeds for organic growth in Europe and the Americas. The bank also intends to return half the freed-up capital to shareholders, equal to around 3.2 billion euros, through a share buyback — accelerating its 2025–2026 repurchase goal of up to 10 billion euros.

Erste’s funding for the acquisitions comes through balance sheet optimization, the cancellation of a 700-million-euro share buyback, and a temporary reduction in its dividend payout ratio.

The transaction marks a rare consolidation move in Central and Eastern Europe’s banking sector, where foreign players have been cautious in recent years amid regulatory complexity and shifting monetary policies. Erste, which has a strong presence across the region, appears to be betting on the Polish market’s profitability and long-term growth potential.

The deal awaits customary regulatory approvals and is expected to close later this year. Neither bank disclosed details about potential management changes at the Polish unit following the partial sale.