Abbey National has agreed to a cash and shares takeover offer from Spain's largest bank Santander Central Hispano (SCH).
The deal would give Santander the sixth-biggest bank in Europe's biggest consumer credit market and one of the world's most profitable banking sectors.
SCH offered one share plus 25 pence in cash for each share in Britain's second-biggest mortgage lender.
The offer values Abbey at about £8.2 billion (€12.4 billion).
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The deal is the first foreign takeover of a major British bank since HSBC bought Midland in 1992 and the first ever by a European lender.