NEW YORK, N.Y. – BB&T, a commercial bank based in North Carolina, is buying Susquehanna Bancshares in a deal that will broaden the bank’s reach into the Mid-Atlantic region.
News of the deal, which is worth $2.5 billion in cash and stock, sent Susquehanna’s stock price soaring. Based on Susquehanna’s closing price Tuesday, BB&T is paying a 39 per cent premium.
Shares of Susquehanna, which is based in Lititz, Pennsylvania, jumped 33 per cent to $13.12. BB&T’s shares fell 1.7 per cent to $37.67.
BB&T has been expanding recently, and the deal announced Wednesday is one of the largest deals in the banking sector since the financial crisis. Susquehanna has assets of approximately $18.6 billion, compared with $187 billion for BB&T.
The bank will create three new banking regions that oversee markets in New Jersey and Pennsylvania, while the Baltimore region will be brought into the areas Susquehanna operates.
Susquehanna executives will run those regions and the bank’s Chairman and CEO, William Reuter, will take a seat on BB&T’s board.
Susquehanna has 245 locations in Pennsylvania, Maryland, New Jersey, and West Virginia.
BB&T will take a pre-tax merger and integration charge of $250 million, but expects $160 million in annual savings.
The deal has been approved by the boards of both companies, but still requires a nod from Susquehanna shareholders and regulators.