A massive banking merger worth more than $12 billion could face significant obstacles following President Donald Trump’s announcement to suspend trade relations with Spain, according to a financial analyst’s warning issued Tuesday.
Wells Fargo analyst Mike Mayo has lowered his rating on Webster Financial’s stock, expressing concerns that regulatory approval for Banco Santander’s acquisition of the U.S. regional bank may become more difficult to secure. The Spanish banking giant announced the purchase deal just last month.
In his client advisory, Mayo explained his reasoning: “The U.S. president today said trade with Spain will halt. We extrapolate this comment to mean that U.S. regulatory approval for Banco Santander to acquire Webster will be incrementally harder to obtain.”
The acquisition represents a strategic move by Spain’s biggest financial institution to establish itself among America’s top 10 retail and commercial banking operations. Should regulators give their blessing, the merged entity would control roughly $327 billion in total assets across the United States.
Santander’s Executive Chair Ana Botin addressed the situation during a Bloomberg TV appearance, expressing optimism about future U.S.-Spain relations. “Spain and the U.S. have had a great long-term relationship and that is where we are going back to. But we are surely living in extraordinary times,” she stated.
While Botin avoided discussing regulatory matters or deal approval specifics, she emphasized Santander’s commitment to continuing service for its 5 million American banking customers.
Mayo’s analysis suggests that even under the most favorable circumstances, growing trade friction between Washington and Madrid would likely prolong the approval timeline. He also warned that if regulators ultimately reject the merger, competing banks might pursue Webster at a reduced price, potentially cutting the deal value by 10 percent.
Financial markets reflected these concerns Tuesday, with Webster’s stock price falling 3.2 percent during late trading hours, while Santander shares ended the day down more than 6 percent.
