=SunTrust Banks (STI) to be acquired by BB&T Corp (BBT)

• Update Dec 09, 2019:  SunTrust bank merger completed with BB&T, creating Truist (TFC), based in Charlotte, North Carolina. The merger between Atlanta-based SunTrust and Winston-Salem, N.C.-based BB&T has been completed, creating the nation’s sixth-largest bank, serving about 10 million consumer households.
• BB&T and SunTrust have agreed to merge into a new and as-yet-unnamed bank, in an all-stock deal valued at approximately $66 billion. The new bank, which would have its headquarters in Charlotte, N.C., will be the sixth-largest in the U.S. based on assets and deposits.

BB&T Corp and SunTrust (STI) to combine in all-stock merger of equals valued at approximately $66 bln

The pro forma company will have approximately $442 billion in assets, $301 billion in loans, and $324 billion in deposits serving more than 10 million households in the United States, with leading market share in many of the most attractive, high-growth markets in the country. The incremental scale positions the new company to achieve industry-leading financial and operating metrics with the strongest return profile among its peers.

• GAAP and Cash EPS accretion per BB&T share in 2021 is expected to be approximately 13% and 17%, respectively (based on Street estimates). GAAP and Cash EPS accretion per SunTrust share in 2021 is expected to be approximately 9% and 16%, respectively (based on Street estimates). SunTrust shareholders will receive a 5% increase in their dividend upon consummation of the transaction based upon each Company's current dividend per share.
• Under the terms of the merger agreement, SunTrust shareholders will receive 1.295 shares of BB&T for each SunTrust share they own. BB&T shareholders will own approximately 57% and SunTrust shareholders will own approximately 43% of the combined company.
• Expected to deliver approximately $1.6 billion in annual net cost synergies by 2022. The primary sources of cost savings are expected to be in facilities, information technology/systems, shared services, retail banking and third-party vendors.

(Reuters) - BB&T Corp will buy SunTrust Banks Inc for about $28 billion in an all-stock deal, the companies said on Thursday, creating the sixth largest U.S. lender in the biggest bank deal since the 2007-2009 financial crisis.

The two companies called it a merger of equals, valued at $66 billion.

The combined company will operate under a new name and have around $442 billion in assets, $301 billion in loans and $324 billion in deposits, and will rival Citigroup Inc and Bank of America Corp.

The deal comes at a time when the Trump administration is pushing for easing crisis-era regulations that restricted expansion and added increased regulatory scrutiny on big banks.

Added to that, changes in the U.S. tax laws that lowered corporate tax also freed up capital and Wall Street has long been expecting a wave of dealmaking in the banking sector.

As part of the deal, SunTrust shareholders will receive 1.295 shares of BB&T for each share they own. The per share deal value of $62.85 is at a 7 percent premium to SunTrust's closing price on Wednesday, according to a Reuters calculation.

Atlanta-based SunTrust rose 5.5 percent to $62 before the opening bell, a few cents short of its acquisition price.

BB&T shareholders will own 57 percent of the combined company and SunTrust will own the rest.

The deal, expected to close in the fourth quarter, will likely result in annual cost savings of around $1.6 billion by 2022, the companies said. The merger is will generate an internal rate of return of about 18 percent.

Kelly King, BB&T's chief executive officer, will be the CEO of the combined company until Sept.12, 2021, after which SunTrust CEO, William Rogers Jr will take over.