U.S. regional lender BB&T Corp and SunTrust Banks Inc came to an agreement to be merged, a biggest merger deal in the banking industry since financial crisis the industry faced during 2007-2009 came mostly of the permissive regulatory environment.
BB&T last week announced of buying rival SunTrust for an all-stock deal of about $28 billion.
Both banks are expecting the deal to be closed later this year, which probably will not be scheduled before the government’s decision to ease crisis- era regulations that restricts the banks from expanding and also imposes heightened scrutiny over them.
But the merger will be coming out pushing other regional banks to go for similar moves, as seeing the analysts.
This year at the World Economic Forum in Davos, Switzerland, a new series of big bank mergers was predicted by Brian Moynihan, Chief Executive of Bank of America.
After merger, there will be a new brand name under which the new combined company will be operating and it would have assets of $442 billion, with $301 billion in loans while having deposits of $324 billion.
The combined company will continue to be operating in their home markets of Atlanta, Georgia and Winston-Salem, North Carolina, but will be landing in Charlotte, North Carolina as its new corporate headquarters.
For the merger, each share of SunTrust has been valued at $62.85 and its shareholders will receive 1.295 shares of BB&T against each SunTrust’s share they own.
SunTrust shareholder will own 43 percent of the combined company while larger portion of 57 percent will be owned by shareholder of BB&T.
BB&T’s Chief Executive Officer, Kelly King will lead the combined company as CEO until Sept 12, 2021 with Roger, CEO of SunTrust to be take over the charge of CEO after that.
Valued at $66 billion, it has been called as merger of equals by both the companies.