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March 26, 2021, 2:31 a.m. EDT

Santander to buy outstanding shares of Mexico unit

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By Mauro Orru

Banco Santander SA said Friday that it intends to make a cash offer to buy the outstanding shares of its Mexican subsidiary that it doesn't already own for a total consideration of around 550 million euros ($647 million).

The Spanish bank said the offer would target about 8.3% of its Mexican subsidiary's share capital, with the transaction expected to be completed in the second or third quarter.

Santander said the deal would bolster its growth profile and capacity to generate capital, improving earnings per share by 0.8% in 2023.

The transaction is also expected to have a return on invested capital of about 14%, and reduce the group's CET1 ratio by about eight basis points, it said.

Also, Santander confirmed business has remained strong in the first quarter, with revenue in line with that of the fourth quarter of 2020.

The bank said it expects an underlying return on tangible equity of about 10% by the end of 2021.

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

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