BB&T Corp. agreed to buy SunTrust Banks Inc. in the world’s largest bank merger in more than a decade, betting that a combination will allow them to keep up with bigger rivals in the arms race for new technology.
The $28 billion deal scraps both companies’ names and headquarters, creating an entirely new bank based in Charlotte, North Carolina, with branches throughout the Southeast. It will be the sixth-biggest commercial bank in the U.S. by assets, supplanting PNC Financial Services Group Inc.
Industry executives have long predicted a wave of bank mergers that until Thursday had played out only in smaller or midsize deals. Brian Moynihan, chief executive officer of Bank of America Corp., said last month he could envision the creation of another megabank, given the large number of small players spread throughout the country. And Ernst & Young said it expects a flurry of transactions this year, fueled by easing regulations and the U.S. tax overhaul, which helped lenders build a war chest to spend on acquiring new clients and technology.
SunTrust shares climbed 8.7 percent to $63.84 at 10:10 a.m. in New York, their biggest increase in intraday trading since 2011. BB&T rose 2.9 percent.
This article was provided by Bloomberg News.