BB&T To Acquire Susquehanna Bancshares In $2.5 Bln Deal

(RTTNews) - Regional bank BB&T Corp. (BBT) agreed Wednesday to acquire Susquehanna Bancshares, Inc. (SUSQ) in a cash and stock deal valued at about $2.5 billion. The deal will significantly expand BB&T's market share in the attractive Mid-Atlantic region and improve its ranking to no. 5 in Maryland.

"We are extremely excited to welcome our new clients and associates in these attractive markets to BB&T. Susquehanna's culture, commitment to its communities and business model are a strong fit with BB&T," BB&T Chairman and CEO Kelly King said in a statement.

The offer price, valued at $13.50 per share, represents a 36.4 percent premium over Susquehanna's closing share price of $9.90 on Tuesday. Susquehanna shares are currently soaring $3.02 or 30.51% in pre-market deals.

The deal will see Susquehanna shareholders receive 0.253 shares of BB&T common stock and $4.05 in cash for each share of Susquehanna common stock.

Lititz, Pennsylvania-based Susquehanna is a top 50 bank in the U.S. with $18.6 billion in assets, $13.6 billion in deposits and 245 banking offices in Pennsylvania, Maryland, New Jersey, and West Virginia.

The deal, approved by the Board of Directors of each company, is expected to close in the second half of 2015. The closure of the deal is primarily subject to regulatory approvals and approval of Susquehanna shareholders.

Following the closure of the deal, Susquehanna's Chairman and CEO William Reuter, and Christine Sears, a Susquehanna Board member, will join BB&T's Board of Directors.

Winston-Salem, North Carolina-based BB&T said the deal is strategically compelling, and financially attractive as well as a strong fit with its culture and community banking model.

BB&T expects the acquisition to be accretive to earnings per share in the first full year excluding one-time charges and expects the transaction to exceed its IRR hurdle. It also expects to incur pre-tax merger and integration costs of about $250 million and expects to achieve annual cost savings of about $160 million.

"Similar to our recently announced market expansion acquisitions in the Dallas, Houston and Cincinnati markets, Susquehanna expands our franchise into a contiguous, attractive region that presents an exciting opportunity for us. The diversity of our markets is a key element of our long-term success," King added.

The acquisition of Susquehanna builds on BB&T's recent expansions in Cincinnati and Texas. BB&T recently acquired 63 branches of Citigroup, Inc. (C) in Texas, and The Bank of Kentucky Financial Corp. (BKYF) in Cincinnati.

In connection with the acquisition, BB&T plans to establish three new banking regions encompassing certain markets in Pennsylvania and New Jersey. BB&T also plans to integrate its Baltimore region with Susquehanna's. These four regions are expected to be led by legacy Susquehanna executives.

"We look forward to being a part of BB&T's storied franchise. BB&T's expanded product offerings and resources combined with a stronger balance sheet will enable us to better serve our clients, associates and communities," Reuter stated.

BBT closed Tuesday's regular trading session at $38.33, down $0.15 on a volume of 1.55 million shares. In the past 52-week period, the stock has been trading in a range of $32.85 to $41.04.