CINCINNATI—Fifth Third Bank on Monday announced a $10.9 billion all-stock acquisition of regional rival Comerica, a deal that will create the nation’s ninth-largest bank, Reuters reported.
Comerica shareholders will receive 1.8663 Fifth Third shares for each Comerica share, valuing the deal at $82.88 per share based on Fifth Third's closing price on Oct. 3, Reuters said.
"Following the acquisition, Fifth Third will rank among the top five banks in every major Midwest MSA (Metropolitan Statistical Area)," TD Cowen analysts told Reuters.
The deal will create a bank with $224 billion in deposits and $174 billion in loans.
The pioneer of credit union purchases of banks, Michael Bell, commented on the deal.
“We are seeing consolidation up and down the size spectrum in the financial services industry,” said Bell, partner and chair of the Financial Institutions Practice Group at Honigman, LLP. “You can certainly argue about the pros and cons of this reality, but it is reality. Our economic system and market forces drive this. By the way, this is happening in all industries, not just financial services.”
Bell commented on the attention credit unions receive when two big shops combine.
“Depending on which trade group you ask, bigger is better or bigger is worse,” said Bell, who has been part of more than 75 whole-bank agreements plus additional bank branch purchases. “Bigger for some is acceptable. But bigger for others is not.