What a Combined Susquehanna and BB&T Will Look Like

Banking, finance, and taxes

Published: November 12, 2014 12:15 pm

BB&T Corp. (NYSE: BBT) announced Wednesday morning that it will acquire Susquehanna Bancshares Inc. (NASDAQ: SUSQ) in a $2.5 billion agreement. The deal is a cash-and-stock one in which Susquehanna shareholders will receive 0.253 shares of BB&T and $4.05 in cash for each share held. This deal would value Susquehanna at $13.75 per share, based on Tuesday’s closing price of BB&T.

Tuesday’s closing price for Susquehanna was $9.90, which would place it at a 39% premium, considering the value for it was pegged at $13.75 in the terms of this buyout. Shares of Susquehanna were trading up about 33% at $13.16 coming into the noon hour Wednesday. Susquehanna had a consensus analyst price target of $10.30 and a 52-week trading range of $9.00 to $13.24. Its total market cap is over $2 billion.

As for the costs of this acquisition, BB&T expects pretax merger and integration costs of roughly $250 million. However, the company expects that this deal will save around $160 million in annual costs going forward.

Shares of BB&T traded down 2% at $37.55 following news of the acquisition. The consensus analyst price target is $40.84, and the 52-week trading range is $32.85 to $41.04. BB&T has a market cap near $27 billion.

Susquehanna is a regional financial services holding company that claims to have approximately $18 billion in assets. It includes a commercial bank that provides financial services through more than 240 locations in the Mid-Atlantic region. The company offers investment, fiduciary, brokerage, insurance, retirement planning and private banking services. Susquehanna also operates an insurance and employee benefits company, a commercial finance company, a vehicle leasing company, a mortgage division and a settlement services company.

BB&T is one of the largest financial services holding companies in the United States, with $184.7 billion in assets. It offers a range of consumer and commercial banking, brokerage, asset management, mortgage and insurance products services.

The larger question looms: will this merger beget more bank and financial mergers?

ALSO READ: Stock Market Rally Has Money Pouring Into These 5 Top Stocks

The Average American Is Losing Momentum On Their Savings Every Day (Sponsor)

If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4%¹ today. Checking accounts are even worse.

But there is good news. To win qualified customers, some accounts are paying more than 7x the national average. That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn a $200 bonus and up to 7X the national average with qualifying deposits. Terms apply. Member, FDIC.

Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.

¹https://www.fdic.gov/national-rates-and-rate-caps