BB&T, SunTrust to Merge in $66 Billion Deal

Banking, finance, and taxes

Published: February 7, 2019 8:50 am

Last Updated: January 31, 2020 12:54 am

Calling it a merger of equals, BB&T Corp. (NYSE: BBT) and SunTrust Banks Inc. (NYSE: STI) announced this morning that they are merging in an all-stock transaction worth $66 billion. The share price of both regional banks is up on the news.

The combined company, which will get a new name and a new corporate headquarters in Charlotte, North Carolina, will become the country’s sixth largest bank holding company, with assets valued at $442 billion, deposits valued at $324 billion and loans valued at $301 billion. The combined company’s market cap will be $76 billion, and it will serve approximately 10 million customers.

BB&T Chair and Chief Executive Officer Kelly S. King said:

This is a true merger of equals, combining the best of both companies to create the premier financial institution of the future. It’s an extraordinarily attractive financial proposition that provides the scale needed to compete and win in the rapidly evolving world of financial services.

William H. Rogers, Jr., board chair and chief executive of SunTrust, added:

By bringing together these two mission- and purpose-driven institutions, we will accelerate our capacity to invest in transformational technologies for our clients. Our shared culture embraces the disruption of technology and we will take this innovative mindset to expand our leadership in the next chapter of these historic brands.

SunTrust shareholders will receive 1.295 shares of BB&T for each SunTrust share, along with a 5% increase in their dividend once the transaction is completed, now expected to occur in the fourth quarter of this year. King will become board chair and CEO of the combined company, a position he will hold until September 12, 2021, at which time he will become the company’s executive chair and Rogers will take over as CEO.

The new company’s board will be split evenly between existing board members of both banks, and David M. Ratcliffe, currently lead director of SunTrust, will become lead director of the combined company until March 12, 2022, at which time the lead directorship will transition to a yet-to-be-named legacy BB&T director.

BB&T shares traded up about 6% in Thursday’s premarket, at $51.38 in a 52-week range of $46.68 to $56.31. The consensus 12-month price target on the stock is $53.51.

SunTrust stock traded up about 9.3% to $64.20, in a 52-week range of $46.05 to $75.08. Its 12-month price target is $68.06.

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