Madrid-based

Banco Santander

(STD)

confirmed late Monday it was acquiring the stock of

Sovereign Bancorp

(SOV)

that it doesn't already own for $1.9 billion.

Santander will buy Philadelphia's Sovereign for $3.81 a share, a premium of 3.5% to Sovereign's closing price Monday of $3.68.

Santander has been considered a potential buyer of Sovereign, which has $79 billion in assets and 750 branches in the northeastern U.S., ever since the Spanish bank got a 24.9% stake in Sovereign three years ago and three seats on its board, according to the

Wall Street Journal

.

Under terms of that agreement, Santander was entitled to bid for Sovereign after May 31, 2008, but the Spanish bank had to offer at least $40 a share. That provision was later amended to $38 a share. With Sovereign's stock price down by more than 60% so far this year, the company's directors appeared likely to waive those conditions, the

Journal

reported.

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