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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