RBC lands advisory record with $66bn SunTrust-BB&T merger

RBC lands advisory record with $66bn SunTrust-BB&T merger

BB&T shareholders will own about 57 percent and SunTrust shareholders will own about 43 percent of the business. The value of mergers and acquisitions in the USA financial-services sector more than doubled to US$196.5 billion in 2018 from US$82.3 billion in 2017, EY said. SunTrust Chairman and Chief Executive Officer William H. Rogers, Jr. will serve as President and Chief Operating Officer.

King will serve as CEO of the combined company through September 12, 2021, when Rogers will take over.

The combined company will be based in Charlotte and operate under a new name but continue to have operations in Winston-Salem and Atlanta. "More banks is better than fewer banks". Brian Moynihan, chief executive officer of Bank of America Corp., said last month he could envision the creation of another megabank, given the large number of small players spread throughout the country.

Data provider Dealogic values the deal based on the exchange of shares at $28bn, which makes it the Canadian bank's largest M&A advisory mandate in which it has acted as sole adviser.

The pro forma company will have approximately $442 billion in assets, $301 billion in loans, and $324 billion in deposits serving more than 10 million households in the United States, with leading market share in numerous most attractive, high-growth markets in the country.

BB&T shares rose 0.35% in pre-market trading (bbt), while SunTrust's stock (sti) was up 5.04%. "This gives us the opportunity to be absolutely the most competitive bank". It will keep a wholesale banking center in Atlanta, where SunTrust has its headquarters.

Other regional bank stocks rose on the news of the transaction: Comerica (CMA) was up nearly 6%; Fifth Third (FITB) was up 3%; Huntington Bancshares (HBAN) was up nearly 5%; and Citizens Financial (CFG) was up more than 4%.

In the Baltimore metro area, BB&T has 69 branches with $5.47 billion in deposits for a market share of 7.5 percent, according to the FDIC.

"This is a true merger of equals, combining the best of both companies", King said in a news release about the plan, which he said would bring the banks new scale that will help them "compete and win in the rapidly evolving world of financial services". It was created by the merger of Trust Corp. of Georgia and Sun Banks in 1985.

Deal activity in the banking sector languished after the financial crisis a decade ago as stricter rules were imposed on lenders with more than $50 billion in assets and regulators barred banks with compliance issues from expanding.

Ernst & Young expects a flurry of transactions this year, fueled by easing regulations and the USA tax overhaul, which helped lenders build a war chest to spend on acquiring new clients and technology, the financial advisory firm said in a report last month. King will serve a further six months as executive chairman.

In December, BB&T said it was eliminating its Center City Allentown regional headquarters as well as positions held by Scott V. Fainor and David B. Kennedy, former executives at National Penn Bancshares and longtime Lehigh Valley bankers.

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