BB&T is merging with SunTrust. It will be the largest bank deal since the financial crisis and will create the sixth-largest U.S. bank.
BB&T will buy SunTrust Banks for approximately $28 billion, the companies announced Feb. 7.
The all-stock deal – slated to happen in the fourth quarter of 2019 – will make the new bank (yet to be named) the sixth largest in the U.S. It is the largest bank merger since the financial crisis of 2007-2009.
It is unclear what ramifications – if any – are in store for the banks’ credit card holders at this point.
Top execs speak out
“This is a true merger of equals, combining the best of both companies to create the premier financial institution of the future,” BB&T Chairman and CEO Kelly S. King said in a press release. “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., SunTrust’s chairman and CEO, said the merger would “achieve susbstantially more for clients, teammates, associates, communities and shareholders” than the two firms could separately.
King will remain CEO of the combined company until Sept. 12, 2021, when SunTrust’s Rogers will take the reins.
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The numbersThe merger will likely generate an annual cost savings of approximately $1.6 billion by 2022, according to the two companies. When the deal is complete, BB&T will own the majority of the company – 57 percent – and SunTrust will own 43 percent.
The new bank will serve more than 10 million households in eight states, and its corporate headquarters will be located in Charlotte, North Carolina.
The merger comes at time in which the Trump Administration is striving to ease bank regulations that stemmed from the financial crisis, which previously made it difficult for banks to expand.
In addition, the lowered corporate tax that resulted from last year’s U.S. tax law changes has made the merger viable.