Banco Santander Sells Stake in U.S. Auto Financing Unit

On October 21, 2011, Banco Santander S.A. announced that it has agreed to sell an interest in Santander Consumer USA, its U.S. automotive financing unit, to a group of private equity investors for $1 billion.

Cravath is representing Banco Santander and its subsidiaries in connection with this transaction. Under the terms of the agreement, Sponsor Auto Finance Holding Series, a newly formed entity owned by funds affiliated with Warburg Pincus LLC, Kohlberg Kravis Roberts & Co. and Centerbridge Capital Partners LLC, will invest a combined $1 billion for a 25% share in Santander Consumer USA. Dundon DFS LLC, an entity affiliated with the current CEO of Santander Consumer USA, will invest approximately $150 million to increase its holding in Santander Consumer USA to 10%.

The Cravath team included partner Richard Hall on corporate matters and Michael L. Schler on tax matters.