M&T Bank Corp. may merge with Sovereign Bank in a deal that would broaden operations of Spanish banking giant Banco Santander SA here in the states.

Santander does business in the U.S. under the name Sovereign Bank.

No final deal has been hammered out and the talks still could fall apart.

One scenario puts Sovereign Bank under the management of Buffalo-based M&T. Meanwhile, Santander could initially hold a minority stake in the combined U.S. banking operations and eventually increase that ownership to more than 50 percent.

Over the past few months, various reports have surfaced about merger discussions between M&T and Santander. Those discussions reportedly broke down because M&T did not want to give up control.