Published: Sat, February 09, 2019
Business | By Eloise Houston

USA banks BB&T and SunTrust announce $66 billion merger

USA banks BB&T and SunTrust announce $66 billion merger

And both companies have their names on buildings downtown - with SunTrust's atop its namesake SunTrust Center at 919 E. Main St. and BB&T's across the face of one of the Riverfront Plaza towers on East Byrd Street. Southern National evolved from the Bank of American, which was established by former North Carolina governor Angus MacLean and Judge Thomas A. McNeill in 1897 with $15,000.

As part of the deal, SunTrust shareholders will receive 1.295 shares of BB&T for each share they own.

A mammoth $66 billion bank merger announced Thursday morning has the potential to bring a wave of changes to the Richmond banking and finance scene.

Two of the largest United States regional banks are joining forces in a bid to compete with the nation's biggest players.

Kelly S. King, Chairman and Chief Executive Officer of BB&T and its bank subsidiary, will serve as Chairman and Chief Executive Officer of the combined company and its bank subsidiary until September 12, 2021, after which time he will serve as Executive Chairman of both entities until March 12, 2022. There are more than 10 million households served by BB&T and SunTrust now. BB&T shareholders will own approximately 57 percent and SunTrust shareholders will own approximately 43 percent of the combined company.

The two banks have always been considered natural partners and advisers said they do not expect another bank to make a bid.

Also, changes in the USA tax laws that lowered corporate tax also freed up capital and Wall Street has always been expecting a wave of dealmaking in the banking sector.

It will keep a community banking center in Winston-Salem, North Carolina, where BB&T is based.

Executives said they did not expect regulators to demand significant divestitures and that the deal would close in the fourth quarter of 2019. BB&T has always been based in Winston-Salem, N.C., while SunTrust is based in Atlanta.

"This is a true merger of equals, combining the best of both companies to create the premier financial institution of the future", King said. It also has two branches in Plant City and one in Poinciana. Both banks have large offices in downtown Lakeland, just two blocks apart between Florida and Tennessee avenues. Brian Moynihan, chief executive officer of Bank of America Corp., said last month he could envision the creation of another megabank, given the large number of small players spread throughout the country. King will continue to serve on the Board of Directors of the combined company until the end of 2023.

BB&T Chairman and CEO Kelly S. King will perform those same roles in the new bank until 2021 - when current SunTrust Chairman and CEO William H. Rogers, Jr., will take over as CEO. He will then become CEO for six months, after which he'll add board chairman to his title.

Shares of SunTrust jumped more than 10 percent Thursday to close at $64.72, while BB&T's stock rose almost 4 percent to close at $50.46.

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