Ohio-based Fifth Third Bank has announced that it has agreed to acquire rival firm MB Financial in a deal valued at $4.7bn.
The transaction will be comprised of 90% Fifth Third stock and 10% cash, with MB Financial shareholders to receive 1.45 shares of Fifth Third stock and $5.54 in cash for each share.
Fifth Third has invested more than $1.9bn in the Chicago region in the past two years, with the acquisition of MB Financial, one of Chicago’s most significant banks, set to significantly bolster the firm’s regional presence.
“There were no other potential partners of the same caliber as MB Financial in the Chicago market, and we are very pleased to reach an agreement to merge our companies,” said Greg Carmichael, Chairman, President and CEO of Fifth Third Bancorp. “We view MB Financial as a unique partner in our efforts to build scale in this strategically important market.”
The merger is expected to create the fourth largest company in terms of total deposits in the Chicago area out of more than 200 banks with a 6.5% market share, whilst it will also retain a 20% market share in middle market relationships in the city, ranking it second.
“I am very excited to lead the combined organization in Chicago,” said Mitchell Feiger, President and CEO of MB Financial. “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.”
The transaction is subject to regulatory approval, and the go ahead of MB Financial shareholders.