Steve Steinour, CEO of Huntington Bancshares, shown in a file photo from 2010.
Huntington Bancshares HBAN, -3.83% said it would acquire FirstMerit Corp. for $3.4 billion in stock and cash in a tie-up of two Ohio-based lenders.
The deal was unveiled early Tuesday morning.
The purchase price represents a premium to FirstMerit’s FMER, -4.42% nearly $2.7 billion market capitalization before The Wall Street Journal reported the two sides were in advanced deal talks.
The largest U.S. lenders are effectively prohibited by regulators from doing big deals, but regional banks have steadily consolidated since the financial crisis.
These banks face pressure on profits from regulatory costs and low interest rates, factors that have played a role in some of this consolidation.
Columbus-based Huntington, with $71 billion in assets, is one of the smaller banks to be subject to the Federal Reserve’s “stress tests,” which apply to firms with at least $50 billion in assets. FirstMerit, which is scheduled to report fourth-quarter earnings Tuesday, had $25.2 billion in assets as of Sept. 30.
FirstMerit shares climbed more than 10% Monday in after-hours trading after the Journal reported that the firms were in advanced talks.
An expanded version of this report appears on WSJ.com
Source: http://www.marketwatch.com/story/huntington-bancshares-signs-34-billion-deal-to-buy-firstmerit-2016-01-26
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