Banking & Finance, Real Estate, and Retail

Bank making $4.7B acquisition

May 21, 2018
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Fifth Third Center
Cincinnati-based Fifth Third Bancorp has $142 billion in assets and operates 1,153 branches in 10 states, as of March 31, 2018. Courtesy Fifth Third Bank

A bank with a major West Michigan presence is buying a Chicago-based bank for $4.7 billion.

Cincinnati-based Fifth Third Bancorp said today it is acquiring MB Financial.

About 90 percent of the consideration will be in stock, with the rest in cash.

Based on the closing price of Fifth Third’s common shares on May 18, common shareholders of MB Financial will receive $54.20 of total consideration, consisting of 1.45 shares of Fifth Third common stock and $5.54 in cash for each share of MB Financial common stock.

The consideration implies a premium of about 24 percent over MB Financial’s closing share price on May 18.

In conjunction with the closing of the transaction, two members of MB Financial’s board of directors are expected to join the Fifth Third board.

MB Financial is the holding company for MB Financial Bank, N.A. The company has about $20 billion in assets and has served the Chicago market for over 100 years.

The deal will result in a total Chicago deposit market share of 6.5 percent, ranking the combined company fourth in total deposits and second in estimated retail deposits among the nearly 200 banks in the marketplace. Additionally, the combined company will have a 20-percent share of middle-market relationships in Chicago, ranking it second.

“We view MB Financial as a unique partner in our efforts to build scale in this strategically important market,” said Greg Carmichael, chairman, president and CEO, Fifth Third Bancorp. “Customers of both banks will benefit from greater convenience and the complementary capabilities that our banks, together, can offer.”

The transaction is subject to the satisfaction of all customary closing conditions, including regulatory approvals and the approval of MB Financial shareholders.

“Teaming up with Fifth Third allows us to leverage our complementary capabilities for the benefit of our customers and the communities we serve,” said Mitchell Feiger, president and CEO, MB Financial. “I am very excited to lead the combined organization in Chicago. Our commercial expertise and strong credit culture complement the strengths of Fifth Third in large corporate lending, capital markets, wealth management and the payments business. Both organizations are committed to a successful integration.”

Citi served as financial advisor to Fifth Third, and Simpson Thacher & Bartlett served as legal advisor to Fifth Third.

Sandler O’Neill + Partners served as financial advisor to MB Financial, and Silver Freedman, Taff & Tiernan and Vedder Price served as legal counsel to MB Financial.

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