BB&T will buy SunTrust in deal worth $66 billion

The new 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, according to the announcement by the banks.

"Everything went in the middle of the table, headquarters, the name ... all those things that people get caught up in", SunTrust CEO Bill Rogers told analysts on a conference call.

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.

When the two Southern banks are combined, the new company will serve more than 10 million USA households, with approximately $442 billion in assets, $301 billion in loans, and $324 billion in deposits, according to a joint news release detailing the plan. The new company's market value will be about $76 billion. "This gives us the opportunity to be absolutely the most competitive bank". In 2021, Rogers will take over as CEO.

A Wachtell Lipton memo said the speed of the approvals was evidence of an "increasingly favorable regulatory environment for bank M&A".

The deal still must be approved by federal banking regulators and shareholders but is expected to close before the end of the year. The primary sources of cost savings are expected to be in facilities, information technology/systems, shared services, retail banking and third-party vendors.

The two banks have hundreds of branches within two miles of each other, but they serve different segments of the market.

"In the last few weeks, we started really looking at the possibility that we could actually put our companies together", King said.

The deal certainly will be disruptive to the way the companies separately have done business.

Big bank mergers had been nonexistent after the financial crisis, when a flurry of government-directed mergers created a handful of megabanks. They've now decided that a big merger is better than that go-it-alone strategy.

Atlanta, Georgia-based SunTrust, and BB&T of Winston-Salem, North Carolina, said the combined company - to be based in Charlotte, North Carolina - would operate under a new name and brand, reflecting "the equal contribution both banks bring" to the venture. BB&T has always been based in Winston-Salem, N.C., while SunTrust is based in Atlanta. It will keep a wholesale banking center in Atlanta, where SunTrust has its headquarters. In a CNBC interview, executives said the merger would allow them to invest more heavily in new technology demanded by customers.

SunTrust shareholders will receive 1.295 shares of BB&T for each share they own.

BB&T will own 57 percent of the combined company and SunTrust shareholders will own about 43 percent. SunTrust shareholders will receive a 5 percent increase in their dividend once the deal is complete. They include Chris Henson, Clarke Starnes (Chief Risk Officer), Daryl Bible (Chief Financial Officer), Allison Dukes, Brant Standridge, David Weaver, Dontá Wilson, Ellen Fitzsimmons, Ellen Koebler, Hugh (Beau) Cummins, Joseph Thompson and Scott Case. On March 12, 2022, Rogers will also become Chairman and Chief Executive Officer of the combined company and its bank subsidiary.

King will serve as chairman and CEO of the new company until September 2021, but will stay on the board through 2023.

Vanessa Coleman

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