Reuters/Jim Young
SunTrust Banks and BB&T have agreed to a $66 billion merger that will create the sixth-largest US bank.
The deal pays SunTrust shareholders 1.295 BB&T shares for each SunTrust share they own, according to a joint statement released Thursday morning. BB& T shareholders will own about 57% of the combined company. Bloomberg data shows the deal amounts to BB&T paying $28.1 billion for SunTrust — a roughly 7% premium to Wednesday’s closing price.
"This is a true merger of equals, combining the best of both companies to create the premier financial institution of the future," said BB&T Chairman and Chief Executive Officer Kelly King. "It’s an extraordinarily attractive financial proposition that provides the scale needed to compete and win in the rapidly evolving world of financial services.
The transaction will provide an estimated $1.6 billion of synergies by 2022, the press release said. The combined company will operate under a new name and will be headquartered in Charlotte, North Carolina, but maintain large operations in Winston-Salem, North Carolina and Atlanta, Georgia — the location of the two companies current headquarters.
Once the merger is complete, BB&T Chairman and CEO Kelly King will maintain his roles at the new company until September 12, 2021, when he will become executive chairman until March 12, 2022, the statement said. He will remain on the board of directors until the end of 2023.
Meanwhile, SunTrust Chairman and CEO William Rogers will take the role of president and COO at the newly formed company, and then become CEO when King transitions to executive chairman.
The deal is expected to close in the fourth quarter of 2019.
SunTrust shares were up 8.5% following the news and BB&T’s were higher by 4.8%.
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Source: Business Insider