Abbey Agrees To Be Acquired

Abbey National PLC, London, the second-largest mortgage lender in the United Kingdom, has agreed to be acquired by Banco Santander, Madrid.According to the Council of Mortgage Lenders, a British trade group, Abbey had an 11.5% market share last year for mortgages in the country, behind only HBOS (the combination of Halifax and Bank of Scotland) at 22.5%, but ahead of the Nationwide Building Society and Lloyds TSB, both at 9.3%. In 2001 Lloyds TSB made a hostile bid for Abbey that was set aside by regulators. The bid was prompted by Abbey's negotiating with Bank of Scotland for a friendly deal, but the negotiations were fruitless. In 2002, Bank of Ireland submitted a hostile bid for Abbey, while National Australia Bank (the former owner of HomeSide Lending) admitted that it had been in negotiations with Abbey. At current conversion rates, the deal is worth $15.6 billion. "Abbey's leading position in the U.K. mortgage market, combined with its strong distribution network, represents ... a value-creating opportunity based on the application of Banco Santander's commercial and technological best practices to Abbey's banking operations," said Emilio Botin, chairman of Banco Santander.