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First Citizens to acquire CIT
Posted on Friday, 16 October 2020 13:11
First Citizens BancShares is taking CIT Group private for USD 2.16 billion in an all-scrip deal that will create the 19th largest bank in the US based on pro forma assets of USD 110.00 billion.

The exchange ratio implies a value of USD 21.91 per share, based on yesterday’s close of USD 353.32.

First Citizens’ and CIT’s stockholders will own 61.0 per cent and 39.0 per cent, respectively, of the combined company, which will operate under the First Citizens name and will trade on Nasdaq.

As a Raleigh, North Carolina- headquartered entity, it will also maintain significant operation centres in New York; Pasadena; Omaha; Phoenix; Jacksonville, Florida; New Jersey; and Columbia, South Columbia, among other locations.

The two lenders said: “The transformational partnership will create greater scale to drive growth, improve profitability and enhance stockholder value.”

It will also bring together First Citizens’ low-cost retail deposit franchise and full suite of banking products with CIT’s national commercial lending expertise and strong market positions.

Furthermore, the deal will create an entity with a more diversified deposit strategy in key growth metropolitan statistical areas, including across the southeast of the US.

At close, the merged entity will have pro forma tier 1 leverage of 8.2 per cent, common equity tier 1 of 9.4 per cent, a tier 1 risk-based capital of 10.5 per cent, and a total risk-based capital of 12.5 per cent.

Zephyr, the M&A database published by Bureau van Dijk, shows 1,117 deals targeting banks have been announced globally in 2020 to date.

Of these, 36 are public takeovers and First Citizens acquisition of CIT will be the sector’s fifth-largest delisting of the year so far.

© Zephus Ltd