BB&T buys SunTrust Bank in $66 billion deal

The merger will create the sixth-largest lender in the US.

US hundred dollars after BB&T SunTrust merger Source: Bloomberg

BB&T has acquired SunTrust Bank in a blockbuster deal worth $66 billion. The two institutions will combine in the largest US bank merger in a decade. Shares of both financial institutions rose after news of the agreement was released.

Why did BB&T buy SunTrust?

BB&T and SunTrust are banks based in the southern states of the US. Both banks likely want to combine their disparate strengths. Local newspapers have noted that BB&T’s community banking will pair well with SunTrust’s focus on larger corporate clients. BB&T bought SunTrust for $28 billion all in stocks, and the banks say that the merger is worth $66 billion. The financial institutions will operate under a new name and have $442 billion in assets. SunTrust shareholders will own 43% of the new corporation, while BB&T stock owners will have 57%. BB&T’s chief executive officer, (CEO), Kelly S. King, released a statement about the acquisition.

‘This is a true merger of equals, combining the best of both companies to create the premier financial institution of the future. It's an extraordinarily attractive financial proposition that provides the scale needed to compete and win in the rapidly evolving world of financial services,’ said King.

SunTrust CEO, William H. Rogers, Jr., also touted the merger as progress for fintech(financial technology) in a statement.

‘Our shared culture embraces the disruption of technology and we will take this innovative mindset to expand our leadership in the next chapter of these historic brands. With our geographic position, enhanced scale and leading financial profile, these two companies will achieve substantially more for clients, teammates, associates, communities, and shareholders than we could alone,’ said Rogers, Jr.

What will the BB&T/SunTrust merger mean for US banking?

While corporate combinations usually mean higher fees for customers and laying off workers, both banks promise that the deal will lead to more growth for their combined 60,000 employees and better service for clients. BB&T and SunTrust’s joint venture will expand their reach across the East Coast of the US. The current US corporate tax cuts also enabled banking institutions to have more capital to make blockbuster deals. Jefferies Financial Group bank analyst, Ken Usdin, noted that the acquisition could lead to more US bank mergers.

‘Scale is the game here.The BB&T/SunTrust merger will open more eyes on the potential for more sizable bank M&A(mergers and acquisitions) to occur,’ said Usdin.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

See an opportunity to trade?

Go long or short on more than 16,000 markets with IG.

Spread bet and trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Bid
Offer
-
-
China 300
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.