:max_bytes(150000):strip_icc()/GettyImages-1157205664-64cafa36f74644889ed01f10af051a79.jpg "Comerica Stock Jumps on .9 Billion Takeover by Fifth Third Bancorp")
:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-1157205664-64cafa36f74644889ed01f10af051a79.jpg)
Key Takeaways
- Fifth Third Bancorp will buy Comerica for $10.9 billion in an all-stock transaction. Comerica shareholders will receive an equivalent of $82.88 for every share they own, a 17.5% premium to Friday’s closing price.
- The purchase is part of Fifth Third’s strategy to expand into key markets and boost its commercial business.
Comerica (CMA) shares jumped Monday morning after Fifth Third Bancorp (FITB) agreed to purchase the financial firm for $10.9 billion.
Shares of Comerica were recently up some 14%. Fifth Third said the all-stock deal gives Comerica investors nearly 1.9 Fifth Third shares for every Comerica share they own, representing $82.88 per share based on Fifth Third’s Friday closing price, a more than 17% premium. First Third shareholders will control about 73% of the combined company, with Comerica investors holding the rest.
Fifth Third’s shares were recently down more than 1%. An index of regional banking stocks was up about 1%.
Why This News Matters
The Fifth Third-Comerica merger marks another wave of consolidation in the regional banking sector as lenders seek to expand their footprints to offset rising costs and tighter regulation. The combined bank will expand Fifth Third’s presence in fast-growing markets in the Sun Belt and diversify its revenue beyond the Midwest.
Fifth Third said the acquisition would create the ninth-largest U.S. bank with $288 billion in assets. It added that the move was part of the Ohio-based bank’s strategy to expand its footprint in high-growth markets and its commercial business.
CEO Tim Spence called the combination “a natural fit” that will create “a stronger, more diversified bank that is well-positioned to deliver value for our shareholders, customers, and communities.”
Comerica CEO Curt Farmer will become vice chair of the merged firm. Chief Banking Officer Peter Sefzik will head the Wealth & Asset Management unit. Three members of Comerica’s board will become members of the Fifth Third board.
The transaction is expected to close at the end of the first quarter of next year.
Prior to today’s session, Comerica shares were up 13% year-to-date.
