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BB&T to combine with SunTrust Banks
Posted on Thursday, 07 February 2019 15:09
BB&T has reached an agreement with SunTrust Banks in regard to a transaction being described as a merger of equals and creating a combined business worth USD 66.00 billion.
Under the terms of the all-stock deal, the shareholders of the latter will receive 1.30 shares of the former for each one held, giving a value of around USD 62.85 apiece, or a total USD 28.24 billion.
BB&T will own about 57.0 per cent of the merged group, while SunTrust Banks will control the rest.
The deal values the target at a premium of 7.0 per cent to its close of USD 58.74 on 6th February 2018, which gave the firm a market capitalisation of USD 26.39 billion.
Combined, the two businesses will have around USD 442.00 billion in assets, USD 301.00 billion in loans and USD 324.00 billion in deposits, while serving over 10.00 million households in the US.
Subject to regulatory and shareholder approval, the deal is expected to complete in the fourth quarter of 2019 and will bring annual cost savings of around USD 1.60 billion by 2022.
The tie-up will position the new company to better achieve industry-leading financial and operating metrics with the strongest return profile.
Benefits include a pro forma efficiency ratio of 51.0 per cent, peer best return on tangible common equity (ROATCE) of 22.0 per cent and an international rate of return of 18.0 per cent for the merger.
Together, the company will be the sixth-largest US bank in the biggest banking deal the country has seen since the 2009 financial crisis, according to Zephyr, the M&A database published by Bureau van Dijk.
It is among the top deals targeting lenders worldwide in the last ten years, behind a capital increase by the Royal Bank of Scotland Group and Cinda Financial Holdings picked up Nanyang Commercial Bank of Hong Kong for HKD 68.00 billion (USD 8.67 billion) in 2016.
© Zephus Ltd