Fifth Third Bancorp in Cincinnati has agreed to buy Comerica in Dallas.
The $210 billion-asset Fifth Third said in a press release that it will pay $10.9 billion in stock for the $78 billion-asset Comerica. The deal, which is expected to close in the first quarter, priced Comerica at 173% of its tangible book value.
The acquisition “marks a pivotal moment for Fifth Third as we accelerate our strategy to build density in high-growth markets and deepen our commercial capabilities,” Tim Spence, Fifth Third’s chairman and CEO, said in the release. “Comerica’s strong middle-market franchise and complementary footprint make this a natural fit.”
Curt Farmer, Comerica’s chairman, president and CEO, will become vice chairman at Fifth Third. Peter Sefzik, Comerica’s chief banking officer, will lead Fifth Third’s wealth and asset management business. Three Comerica directors, including Farmer, will join Fifth Third’s board.
Fifth Third plans to cut about 35% of Comerica’s annual operating expenses, or roughly $850 million. Fifth Third expects to incur $1.3 billion of merger-related expenses.
The deal is expected to be 9% accretive to Fifth Third’s 2027 earnings per share. The acquisition is expected to be slightly accretive to Fifth Third’s tangible book value.
Goldman Sachs and Sullivan & Cromwell advised Fifth Third. J.P. Morgan Securities; Keefe, Bruyette & Woods; and Wachtell, Lipton, Rosen & Katz advised Comerica.
“The deal significantly accelerates Fifth Third’s southern expansion, immediately making [it] a major player in Texas,” Scott Siefers, an analyst at Piper Sandler, wrote in a client note. “Basically, a game-changer. … Plus, the math seems to work very well.”