Spain's biggest bank Santander reached an agreement to acquire 75.65 percent of US lender Sovereign Bancorp, in which it already held a 24.35 percent stake, Santander said in a statement Tuesday.
The deal is worth 1.9 billion dollars (1.4 billion euros).
"This acquisition is an excellent opportunity for Santander and for Sovereign," said Santander chief Juan Rodriguez Inciarte, according to the statement.
Santander earlier confirmed that it was in negotiations with Sovereign which had described the talks as "advanced."
The Wall Street Journal reported over the weekend Santander could pay 3.81 dollars per share for Sovereign, valuing the company at 2.53 billion dollars.
In early trade on Monday, Sovereign shares were down 1.84 percent at 3.74 dollars while the broader market was up by some five percent.
Santander took its stake in Sovereign in 2005 and counts among the world's strongest banks, having avoided most of the problems in the US home loan derivatives market that have sunk many of its peers.
It has made several acquisitions among banks badly hit by the financial crisis, most recently buying British mortgage specialist Bradford and Bingley.
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