North Carolina-based BB&T has agreed to merge with rival US bank holding company SunTrust Banks in an all-stock deal worth around $66bn.
The merger of BB&T and SunTrust Banks is expected to create the sixth-largest bank in the US in terms of assets and deposits that will be based in Charlotte, North Carolina.
The enlarged company will have close to $442bn in assets, $301bn in loans, and $324bn in deposits, serving more than 10 million households in the US. It will operate under a new name and brand, which will be determined before closing of the deal.
Overall, the merger is expected to generate about $1.6bn in annual net cost synergies by 2022.
As per the merger terms, shareholders of SunTrust Banks will exchange their shares for 1.295 shares of BB&T. In the combined bank holding company, BB&T shareholders will own nearly 57% while SunTrust Banks’ shareholders will own the remaining stake of 43% or so.
BB&T chairman and CEO Kelly King said: “This is a true merger of equals, combining the best of both companies to create the premier financial institution of the future.
“It’s an extraordinarily attractive financial proposition that provides the scale needed to compete and win in the rapidly evolving world of financial services. Together with Bill’s leadership and our new SunTrust teammates, we’re going to bring the best of both companies forward to serve our clients and communities.”
Headquartered in Atlanta, Georgia, SunTrust Banks has total assets of $216bn and total deposits of $163bn as of 31 December 2018. It offers deposit, credit, trust, investment, asset management, securities brokerage, mortgage and capital market services.
Its flagship subsidiary, SunTrust Bank offers banking services throughout the Southeast and Mid-Atlantic states.
BB&T, which is headquartered in Winston-Salem, has $225.7bn in assets and market capitalization of about $33.1bn as of 31 December 2018.
The bank holding company provides retail and commercial banking, investments, insurance, wealth management, asset management, corporate banking, capital markets, mortgage and specialized lending. It operates more than 1,800 financial centers located across 15 states and Washington, D.C.
SunTrust Banks chairman and CEO William Rogers, Jr. said: “By bringing together these two mission- and purpose-driven institutions, we will accelerate our capacity to invest in transformational technologies for our clients.
“Our shared culture embraces the disruption of technology and we will take this innovative mindset to expand our leadership in the next chapter of these historic brands. With our geographic position, enhanced scale and leading financial profile, these two companies will achieve substantially more for clients, teammates, associates, communities, and shareholders than we could alone.”
The merger, which will be subject to customary closing conditions such as receipt of customary regulatory approvals and approval of shareholders of both the firms, is anticipated to be completed in the fourth quarter of 2019.