BANKING giants Abbey and Alliance & Leicester are to be merged in a £1.26 billion deal, it has been announced today.

BANKING giants Abbey and Alliance & Leicester are to be merged in a £1.26 billion deal, it has been announced today.

Spanish company Santander, Abbey's parent, plans to merge the pair into a business boasting 959 branches in the UK, which would have more than an 8% share of the savings and personal loans market.

The takeover has been agreed with the Alliance & Leicester board and the deal should be completed in October - provided no rival offer emerges.