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

The deal would give Santander Brazil a market capitalization of between EUR31 billion and EUR35 billion, putting the unit among the world's 30 biggest banks by that measure. By market value, Santander Brazil would equal top tier European banks like Deutsche Bank AG (DB) and Societe Generale SA (GLE.FR).

It is also more than a third of Santander's overall market value of EUR89.3 billion.

The bank will offer its shares in the form of units. Each unit comprising 55 common shares and 50 preferred shares of Banco Santander Brazil SA.

In a regulatory filing Monday, Santander said it plans to sell 525 million of these units in the price range of 22-25 Brazilian reals.

A lower end valuation would allow Santander to raise BRL11.55 billion (EUR4.34 billion), while a high end valuation would give it BRL13.13 billion (EUR4.93 billion).

The IPO is being coordinated by Santander, Credit Suisse (CS), Bank of America Merrill Lynch (BAC), and UBS AG (UBS).

The offering will be priced Oct. 6.

Units 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 has 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 bank has invested heavily in Brazil over the last decade and wants to establish itself alongside the two major private banking titans, Itau Unibanco (ITUB) and Banco Bradesco SA (BBD).

The Spanish bank has been building its presence in Brazil since 2000, when it acquired Sao Paulo state-controlled bank Banespa for $3.75 billion.

Then in 2007, the Spanish bank acquired local retail bank Banco Real as part of a consortium deal with Real's previous owner, Dutch bank ABN Amro Holding NV.

As a result, Santander became Brazil's third-largest private bank by assets, behind Itau Unibanco at number one and Bradesco at number two. Government-controlled Banco do Brasil (BBAS3.BR) is Brazil's largest bank.

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.

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.

At 0839 GMT, Santander's shares were down 0.9%, or EUR0.10, at EUR10.96, 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