Fifth Third Bancorp To Acquire Comerica Bank For $10.9B In All-Stock Deal That Reportedly Will Create One Of The Largest Banks In The US

Fifth Third Bancorp to move forward with the acquisition of Comerica Bank.

Details Surrounding Acquisition

The bank holding company headquartered in Cincinnati announced it will acquire Comerica, a regional bank headquartered in Dallas with a large footprint in the Midwest, for $10.9 billion in an all-stock deal projected to close by 2026, according to CNBC. This will lead to about $288 billion in combined assets and would reportedly form the ninth-largest bank in the U.S. with two $1 billion recurring and high-return fee businesses: Commercial Payments and Wealth and Asset Management, CNN reports.

“The things that have defined Fifth Third over the course of the past 10 years have been this focus on stability, profitability, and our ability to drive organic growth,” Fifth Third CEO Tim Spence told CNBC. “What’s defined Comerica is an incredible middle-market commercial banking platform, and the access that Comerica has to high-growth markets like Texas and large economies like California.”

CNN reports that when the deal closes, Comerica Bank shareholders will receive approximately 1.8663 shares of Fifth Third for each share they hold, giving the transaction an implied value of $82.88 per share based on Fifth Third’s Oct. 3 closing price.

The announcement follows regional banks’ efforts to strengthen their balance sheets and increase revenue streams, CNN mentioned. Comerica plans to build 150 branches in Texas as it rises in the ranks across Dallas, Houston, and Austin.

“In an environment where merger approvals are coming faster, it builds our confidence,” Spence said, according to CNBC. “Regulators believed we had the capacity to run a much larger bank.”

Comerica’s shares are reportedly on the rise, with CNN reporting a 12% increase and CNBC reporting 15%.

“Record bank stock prices have also allowed for a greater currency to do deals, and today’s announcement will likely encourage more boardroom discussions about possible tie-ups, both large and small,” Stephen Biggar, analyst at Argus Research, told CNN.