NEW YORK (AP) – The commercial bank BB&T is buying Susquehanna Bancshares in a cash-and-stock deal worth about $2.5 billion.
That will give the Winston-Salem, North Carolina, bank a broader reach into the Mid-Atlantic region through Susquehanna’s 245 locations in Pennsylvania, Maryland, New Jersey, and West Virginia.
Shares of Susquehanna Bancshares Inc., based in Lititz, Pennsylvania, jumped 32 percent to $13.03 in premarket about an hour before the market opening Wednesday.
Susquehanna shareholders will receive 0.253 shares of BB&T common stock and $4.05 in cash for each of their shares. That comes to $13.50 per share based on the average closing price of BB&T over the 45 trading days ending Monday.
Based on Susquehanna’s closing price Tuesday, BB&T is paying a 39 percent premium.
BB&T has been expanding and the deal announced Wednesday is one of the largest deals in the banking sector since the financial crisis. Susquehanna has assets of approximately $18.6 billion, compared with $187 billion in assets at BB&T
“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,” said BB&T Chairman and CEO Kelly King.
The bank will create three new banking regions that oversee markets in New Jersey and Pennsylvania, while the Baltimore region will be brought into the areas Susquehanna operates.
Susquehanna executives will run those regions and the bank’s chairman and CEO, William Reuter, will take a seat on BB&T’s board.
“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 said.
BB&T Corp. will take a pre-tax merger and integration charge of $250 million, but expects $160 million in annual savings.
The deal has been approved by the boards of both companies, but still requires a nod from Susquehanna shareholders and regulators.