Spain's largest bank buys Britain's Abbey National

LONDON — Spain's biggest bank, Santander Central Hispano SA, is buying Abbey National PLC, Britain's sixth biggest bank and second biggest mortgage lender, for about $15.6 billion in cash and stock.

Santander described Abbey in announcing the deal Monday as "an attractive platform" through which to enter the British banking market, which it believed had "significant potential."

Abbey chief executive Luqman Arnold said the Spanish bank would provide the company with the "know-how" to accelerate the turnaround strategy he started about 18 months ago. Abbey lost nearly $3 billion in 2002 and 2003 before becoming profitable this year.

Abbey's share price has fluctuated widely in recent months as takeover rumors have swirled through the markets. The group has cut jobs, sold non-core assets and reorganized its operations in a three-year overhaul designed to reverse two years of heavy losses.

Under the offer, which needs shareholder approval, Abbey shareholders would receive one new Santander share for every Abbey share, plus 31 pence (57 cents) per share in cash.