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Banco Santander SA (STD) said Monday it plans to raise almost EUR5 billion through its previously announced initial public offering of shares in its Brazilian unit, giving the Spanish banking giant more heft to take on bigger rivals in Latin America's biggest economy.

In a regulatory filing, Santander said it will sell 525 million units, or 16.21% of Banco Santander Brazil SA's current share capital. Each unit will be sold for between 22-25 Brazilian reals, giving Santander between BRL11.55 billion (EUR4.34 billion) and BRL13.13 billion (EUR4.93 billion).

Analysts had expected the Spanish lender to raise some EUR2.5 billion from the IPO.

The share offering will be priced Oct. 6.

Shares in Santander Brazil will trade both in Brazil and in New York. Its American Depositary Receipts are set to debut on the New York stock exchange Oct 7, while it will start trading on the Brazilian exchange Oct 8.

Santander had said that the bulk of the proceeds would be spent on opening 600 branches in Brazil by 2013, expanding its network by almost a third.

The offer includes a green shoe option for the investment banks that are arranging the share sale. Excluding the green shoe, Santander Brazil's free float following the IPO will be 15.6%, Santander added.

Santander, the biggest bank in the euro zone by market valuation, already has a strong presence in Brazil, commanding a 10.2% market share in terms of assets.

In 2007, a consortium including Santander acquired Dutch bank ABN Amro. Under the deal, the Spanish bank took over Banco Real, ABN Amro's Brazilian operation, adding to its existing retail business.

Santander in Brazil has a network of 2,091 branches and 1,521 on-site service units located at corporate customers' premises. The bank has 21 million customers in the country.

At 0714 GMT, Santander's shares were down 0.2%, or EUR0.03, at EUR11.13, in line with the Spanish market.

Company Web site: www.santander.com

-By Christopher Bjork, Dow Jones Newswires, +34 91 395 81 23, christopher.bjork@dowjones.com