Webster Financial's (WBS) pending sale to Banco Santander (SAN) likely faces no material risk amid a favorable regulatory backdrop for M&A deals, UBS said in a note Tuesday.

"While we view the macro environment as uncertain, we see no substantial risk that could derail the deal closing," the note said, adding the regulatory scenario is "supportive for the success of M&A deals, especially compared to the prior administration."

UBS said the "sizeable" termination fees of about $500 million for Webster are also an incentive for the deal to proceed, adding the transaction is expected to close in H2.

Webster shares are "trading in-line with deal terms, implying minimal market skepticism," the investment firm said.

UBS assumed coverage of Webster with a neutral rating and a $69 price target, down from $75 previously.

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