Santander Mexico in Santander Spain’s Exchange Offer

August 28, 2019

Cleary Gottlieb is representing Banco Santander México S.A., Institución de Banca Múltiple, Grupo Financiero Santander México (Santander Mexico) in an exchange offer made by Banco Santander S.A. (Santander Spain) to acquire all the issued and outstanding Series B shares of Santander Mexico and American depositary shares (ADS) not already owned directly or indirectly by Santander Spain, in exchange for 0.337 of a Santander Spain ordinary share for each Santander Mexico Series B share and 1.685 Santander Spain ADS for each Santander Mexico ADS.

The exchange offer is being conducted in the United States with a concurrent exchange offer made in Mexico.

The exchange offers commenced on August 8, 2019, and are expected to expire on September 6, 2019.

Pursuant to the exchange offers, Santander Spain may acquire up to 24.95% of the share capital of Santander Mexico, equivalent to approximately $2.9 billion. The all-share transaction is valued as the largest M&A transaction in Mexico in 2019 and is subject to review by both the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) and the U.S. Securities and Exchange Commission.

Santander Mexico is the second-largest bank in Mexico based on total assets and provides a wide range of financial and related services, principally in Mexico, including retail and commercial banking, and securities underwriting. Santander Spain is Santander Mexico’s controlling shareholder owning directly or indirectly approximately 75% of Santander Mexico’s total capital stock.