BB&T in Winston-Salem, N.C., has agreed to buy SunTrust Banks in Atlanta to create a $442 billion-asset juggernaut in the Southeast.
The companies said in a press release Thursday that BB&T will pay $28.2 billion in stock for SunTrust, based on the exchange ratio and the number of SunTrust shares outstanding on Oct. 31. BB&T will own 57% of the combined company, which will be rebranded and based in Charlotte, N.C.
The biggest bank merger in more than a decade is expected to close in the fourth quarter.
The company will have $301 billion in loans, $324 billion in deposits and serve more than 10 million U.S. households. The board and the executive management team will be evenly split between BB&T and SunTrust.
The deal is expected to be 13% accretive to BB&T’s earnings per share and 9% accretive for SunTrust.
“This is a true merger of equals, combining the best of both companies to create the premier financial institution of the future,” Kelly King, BB&T’s chairman and CEO, said in the 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.”
The companies expect to cut $1.6 billion in annual expenses by 2022, or roughly 12% of their current costs. The companies said they expect to incur about $2 billion in merger-related expenses.
King will serve as CEO until September 2021 and as chairman through March 2022. He will remain on the board until the end of 2023.
William Rogers Jr., SunTrust’s chairman and CEO, will serve as the company’s president and chief operating officer until he succeeds King as CEO. Rogers, who will join the board, will eventually succeed King as chairman.
Daryl Bible, BB&T’s chief financial officer, and Clarke Starnes, BB&T’s chief risk officer, will have the same titles at the new company. Half of the 14 executive posts will be filled by SunTrust personnel.
The company will operate its community banking business out of Winston-Salem, while wholesale banking will be based in Atlanta. A new innovation and technology center will open in Charlotte.
The companies expect to divest nearly $1.4 billion in deposits.
RBC Capital Markets and Wachtell, Lipton, Rosen & Katz advised BB&T. Goldman Sachs, SunTrust Robinson Humphrey and Sullivan & Cromwell advised SunTrust.