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Shareholders of Huntington Bancshares Incorporated HBAN and TCF Financial Corporation TCF have approved the all-stock acquisition deal. The transaction, announced on December 2020, is expected to close in the second quarter of 2021 subject to regulatory consents.
Post completion, the combined entity will have $168 billion in assets, $134 billion in deposits and $117 billion in loans. Also, it will operate under the name and brand of Huntington with two headquarters in Detroit, MI and Columbus, OH, and maintain its operating presence in all the existing markets.
Notably, the combined company will be one of the top 10 U.S. regional banks, and will rank fifth in approximately 70% of deposit markets. Also, the combined entity with the largest branch share will be positioned at the second in Consumer Deposits in the footprint.
The companies also expect to derive some financial benefits from this deal. Cost synergies are anticipated to be around $490 million, or 37% of TCF Financial's non-interest expenses. Per Huntington’s expectations, the deal is likely to be 18% accretive to earnings by year-end 2022, including the fully phased-in transaction cost synergies.
The combined entity is aimed at capturing market opportunities and boosting the client base through a distinctive, "People-First, Digitally-Powered" customer experience. Moreover, the companies’ expanded scale, technological advancement and increased product offerings will help boost its market share.
Huntington’s acquisition of TCF Financial is in sync with its aim to increase long-term shareholder value in the current era of digitization. The deal is capable to withstand the uncertainty surrounding the economy due to the coronavirus pandemic.
In the current scenario, banking sector has been witnessing an increase in M&A activities, to dodge the heightened costs of regulatory compliance and increased investments in technology, in a bid to be competitive.
M&T Bank Corporation MTB and People’s United Financial Inc. PBCT announced another such merger deal in 2021. The all-stock deal worth $7.6 billion, is expected to close in the fourth quarter of 2021, subject to necessary approvals.
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M&T Bank Corporation (MTB) : Free Stock Analysis Report
Huntington Bancshares Incorporated (HBAN) : Free Stock Analysis Report
Peoples United Financial, Inc. (PBCT) : Free Stock Analysis Report
TCF Financial Corporation (TCF) : Free Stock Analysis Report
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