Continuing a years-long run of bank M&A, SunTrust Banks Inc. and BB&T Corp. announced their boards of directors unanimously approved an agreement to combine in an all-stock merger of equals, which would create the sixth-largest U.S. bank based on assets and deposits. The deal is valued at about $66 billion.
One of the usual reasons for strategic dealmaking is synergies, and the banks expect to deliver about $1.6 billion of them (annual net cost) by 2022. They say the primary sources of cost savings are expected to be in facilities, information technology/systems, shared services, retail banking and third-party vendors.
A new corporate headquarters for the combined company will be established in Charlotte, though the company will maintain the Community Banking Center in Winston-Salem, N.C. and the Wholesale Banking Center in Atlanta.
The combined company will undergo a complete rebranding and will operate under a yet-to-be-determined name, which will be chosen prior to the expected closing of the transaction – expected in the fourth quarter. Also, as a result of the merger, the combined company’s executive management team and board of directors will be split evenly between SunTrust and BB&T executives.
Kelly S. King, current chairman and CEO of BB&T and its bank subsidiary, will maintain his title atop the combined bank’s executive management team until Sept. 12, 2021, after which time he will serve as executive chairman of both entities until March 12, 2022. King will also continue to serve on the board of directors of the combined company until the end of 2023.
William H. Rogers Jr., current chairman and CEO of SunTrust, 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 take over from King as CEO of the combined company and its bank subsidiary. Like King, he will also hold a seat on the combined company’s board of directors. On March 12, 2022, Rogers will also become chairman and CEO of the combined company and its bank subsidiary.
David M. Ratcliffe, current lead director of SunTrust, remains as lead director of the combined company until March 12, 2022, after which the lead director is poised to be a legacy BB&T director.
The rest of the combined company’s management team is set to include Chris Henson, Chief Risk Officer Clarke Starnes, Chief Financial Officer Daryl Bible, Allison Dukes, Brant Standridge, David Weaver, Dontá Wilson, Ellen Fitzsimmons, Ellen Koebler, Hugh (Beau) Cummins, Joseph Thompson and Scott Case.
On the advisor side, RBC Capital Markets LLC and Wachtell, Lipton, Rosen & Katz worked with BB&T, while bankers at Goldman, Sachs & Co. and SunTrust Robinson Humphrey, and lawyers at Sullivan & Cromwell LLP advise SunTrust.