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Banco Santander launches the public offering of up to 24.9% of Santander Mexico for a maximum US$4.291 billion

Emilio Botín: "This transaction is another step in our strategy of having quoted subsidiaries. Our three largest subsidiaries in Latin America will be among the top 100 banks in the world by stock market value."

Mexico City, Sept. 4, 2012 – Banco Santander Chairman Emilio Botín launches today the global public offering of shares of Grupo Financiero Santander México.  Banco Santander is offering up to 1,689,812,333 shares of Santander Mexico – including the shares the underwriters have the option to purchase under the green shoe – representing 24.9% of the unit’s share capital.  According to the prospectus presented today to the Mexican Stock Exchange, the offer is expected to be priced at between 29.00 and 33.50 pesos per share, implying a total offer amount of between EUR 2.957 billion and EUR 3.413 billion. This price range also implies a maximum valuation of EUR 13.708 billion for 100% of Santander Mexico.

According to the preliminary prospectus filed today with the U.S. Securities and Exchange Commission, the offer is expected to be priced between US$10.99 and US$12.70 per American Depository Receipt, each of which represents five shares, for a total offer amount of between US$3.714 billion and US$4.291 billion and valuing all of Santander Mexico at a maximum US$17.235 billion.

The transaction, which will target both individual and institutional investors, is structured in two tranches: one in Mexico, representing 20% of the shares included in the global offering, and one outside Mexico, including the United States, representing 80% of the shares offered. These amounts are subject to reallocation according to demand. The placement process begins today and it is expected that the shares will be quoted in Mexico and New York on or about Sept. 26.

The gains obtained by Banco Santander through this transaction will be registered entirely to reserves, in line with current accounting requirements, as the bank will maintain its control over its Mexican subsidiary. This placement will translate into an increase in the bank’s core capital ratio of about half a percentage point.  Banco Santander’s core capital at June 30, 2012, was 10.1% under Basel II rules.

“The transaction we are presenting today is another step in our strategy of listing our subsidiaries, following the examples of Santander Brasil, Santander Chile, our bank in Poland and Banesto in Spain.  Our three largest units in Latin American will be among the top 100 banks in the world by stock market value. No other group in the world has comparable positions in the global ranking. We have a very clear goal: That in five years, our most important subsidiaries are listed,” Emilio Botín highlights in the presentation of the transaction in Mexico.

“We want to continue playing a part in the growth of Mexico.  I am confident that this transaction marks a new phase in our bank’s history in Mexico and will strengthen our plans for growth and development in the country,” Botín says.

EXPECTED TIMETABLE FOR THE TRANSACTION

Sept. 4: Register the updated preliminary prospectuses with the SEC in the United States and the CNBV in Mexico. Kick-off of the three-week roadshow. 
Sept. 25: Price is fixed
Sept. 26: First day of trading
Oct. 1: Settlement and close.


Santander Mexico has filed a registration statement (including a preliminary prospectus) with the Securities and Exchange Commission (SEC) for the offering to which this communication relates, but the registration statement has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.

Before you invest, you should read the prospectus in that registration statement and other documents Santander Mexico has filed with the SEC for more complete information about Santander Mexico and this offering.  You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov and you may access a copy of the preliminary prospectus at http://sec.gov/Archives/edgar/data/1551975/000119312512378247/d405440df1a.htm

Alternatively, any of the Global Coordinators participating in the offering will arrange to send you the prospectus if you request it from one of the following: Santander, Attention: Kathie Plaia, 45 East 53rd Street, New York, New York 10022, Telephone: +1-212-583-4629, Email: kplaia@external.santander.us; UBS Investment Bank, 299 Park Avenue, New York, NY, 10171 , Telephone: +1 212 821 3000; Deutsche Bank Securities, 60 Wall Street, New York, NY 10005, Telephone: 1-800-503-4611, Email: prospectus.cpdg@db.com; or BofA Merrill Lynch, Attention: Prospectus Directive, 222 Broadway, 7th Floor, New York, NY 10038, Email:dg.prospectus_requests@baml.com. 

Santander launches the public offering of up to 24.9% of Santander Mexico

Emilio Botin during the press conference in Mexico.

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