By Jesús Aguado

MADRID, Nov 12 (Reuters) - Spanish bank Santander improved its €1.9 billion ($2.1 billion) offer to acquire the remaining roughly 10% stake it does not already own in its Brazilian unit, raising the proposed share swap's exchange ratio by 5% on Thursday.

The improved bid follows a 9% rise in the Brazilian unit's shares since July 30, when it first unveiled the offer. Shares in Santander — the euro zone's largest lender in terms of market value — have fallen around 8% in the same period.

Under the revised terms, the premium is now 20% on the Brazilian unit's closing price the day before the deal was originally announced, up from a 15% premium previously, according to Reuters calculations.

While the deal's overall value has not changed, the number of Santander shares the Brazilian unit's shareholders will receive has increased.

Shares in Santander were down 0.2% at 1124 GMT.

For decades, Santander's presence across 10 core markets has helped shield it from economic weakness in individual countries. But that has also left it exposed to currency depreciations, particularly in Latin America, so it has recently bet on expanding in developed markets like the US and Britain.

On Thursday, Santander said the Brazil deal would remain capital neutral and create value for shareholders, as it expected to increase earnings per share by 0.3% from 2029 and tangible book value per share by approximately 0.6%.

The revised offer comes as weaker earnings and higher provisions in Brazil have taken the shine off a 19% rise in Santander's group underlying third-quarter profit, with some brokers including JPMorgan questioning the timing of the deal. Net profit in the third quarter in Brazil fell 15% from a year earlier.

Assuming full acceptance of the offer, Santander would issue 166 million new shares, around 1.1% of its capital.

Santander will seek shareholders' approval for the corresponding capital increases at an extraordinary general shareholders' meeting on December 15.

($1 = 0.9027 euros)

(Reporting by Jesús Aguado; Editing by David Latona and Joe Bavier)

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