Banco Santander to Acquire 75.65% of Sovereign Bancorp it Does Not Currently Own for Approximately US$1.9 billion (euro 1.4 billion)

MADRID, Spain and PHILADELPHIA, Oct. 13 /PRNewswire-FirstCall/ -- Banco Santander, S.A. (NYSE: STD) and Sovereign Bancorp Inc., ('Sovereign') (NYSE: SOV), parent company of Sovereign Bank ('Bank'), announced today that Banco Santander will acquire Sovereign in a stock-for-stock transaction. Santander currently owns 24.35% of Sovereign's ordinary outstanding shares. The Capital and Finance Committee composed of independent directors of Sovereign requested that Santander consider acquiring the 75.65% of the Company it did not currently own. The Capital and Finance Committee evaluated the transaction and recommended the transaction to the full Board.

Under the terms of the definitive transaction agreement, which was approved by the Executive Committee of Santander and unanimously approved by the non-Santander directors of Sovereign, 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 (euro 1.4 billion), or US$3.81 per share. The transaction meets Santander's criteria for acquisitions, both strategically, by significantly enhancing the geographical diversification of the Group, and financially, with a projected net profit for Sovereign of $750 million in 2011.

Juan R. Inciarte, Executive Board Member of Banco Santander, stated, 'This acquisition represents an excellent opportunity for Santander and for Sovereign. We know Sovereign very well. It is a strong commercial banking franchise in one of the most prosperous and productive regions of the United States, with high growth potential, which will further diversify Banco Santander's geographical reach. We look forward to working closely with Sovereign's senior management and welcoming the entire Sovereign team to Santander.'

Ralph Whitworth, Chairman of the Capital and Finance Committee of Sovereign's Board of Directors, said, 'Given the unprecedented uncertainty in the current market environment and the challenges facing Sovereign, we believe this is the right transaction at the right time for Sovereign. We considered our options and this transaction very carefully and believe that it provides stability and upside potential for Sovereign, its shareholders, customers, employees and other stakeholders.