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



SunTrust Bank and BB&T signed a definitive agreement to combine in an all-stock merger of equals valued at approximately $66 billion. The combined company will be the sixth-largest U.S. bank based on assets and deposits.

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. The combined company will operate under a new name and brand, which will be determined prior to closing. The combined company’s board of directors and executive management team will be evenly split between the two institutions. A new corporate headquarters will be established in Charlotte, NC, including an Innovation and Technology Center to drive digital transformation.

GAAP and cash EPS accretion per BB&T share in 2021 is expected to be approximately 13% and 17%, respectively (based on Street estimates). GAAP and cash EPS accretion per SunTrust share in 2021 is expected to be approximately 9% and 16%, respectively (based on Street estimates). SunTrust shareholders will receive a 5% increase in their dividend upon consummation of the transaction based upon each company’s current dividend per share. Under the terms of the merger agreement, SunTrust shareholders will receive 1.295 shares of BB&T for each SunTrust share they own. BB&T shareholders will own approximately 57% and SunTrust shareholders will own approximately 43% of the combined company.

“This is a true merger of equals, combining the best of both companies to create the premier financial institution of the future,” said BB&T Chairman and CEO Kelly S. King. “It’s an extraordinarily attractive financial proposition that provides the scale needed to compete and win in the rapidly evolving world of financial services. Together with Bill’s leadership and our new SunTrust teammates, we’re going to bring the best of both companies forward to serve our clients and communities.”

King will serve as chairman and CEO of the combined company and its bank subsidiary until Sept. 12, 2021, after which time he will serve as executive chairman of both entities until March 12, 2022. King will continue to serve on the board of directors of the combined company until the end of 2023.

Current SunTrust Chairman and CEO William H. Rogers, Jr., t will serve as president and chief operating officer of the combined company and its bank subsidiary until Sept. 12, 2021, at which time he will succeed King as CEO.
Upon the closing of the transaction, the Board of Directors of the combined company will consist of members equally split between BB&T and SunTrust’s current Directors, as will the company’s executive management team.

Both companies’ boards of directors have unanimously approved the transaction. The merger is expected to close in the fourth quarter of 2019, subject to customary closing conditions, including receipt of regulatory approvals and approval by the shareholders of each company.

RBC Capital Markets served as financial advisor and Wachtell, Lipton, Rosen & Katz as legal counsel to BB&T in this transaction. Goldman Sachs and SunTrust Robinson Humphrey served as financial advisors and Sullivan & Cromwell as legal counsel to SunTrust.

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