SunTrust Banks to Acquire Crestar Financial for $9.5 Billion

Strategic Insights -

SunTrust Banks, a leading banking institution in the southeastern United States, has announced its decision to acquire Crestar Financial in a deal valued at $9.5 billion. This strategic move aims to expand SunTrust's presence along the East Coast, particularly in the fast-growing Virginia-Washington D.C. market. The acquisition will create the 10th largest bank in the United States, with an asset base of $88 billion and a vast network of 1,093 branches across six states and the District of Columbia.

Key Takeaways:

  • The acquisition of Crestar Financial by SunTrust Banks will create the 10th largest bank in the United States, with an asset base of $88 billion.
  • The deal will expand SunTrust's reach along the East Coast, particularly in the Virginia-Washington D.C. market, which is the fourth-largest by population in the country.
  • The acquisition is unusual in that it brings together two banks in non-neighboring states, demonstrating SunTrust's commitment to growing its presence in the region.
  • First Union and NationsBank, two major banking institutions, have been expanding through acquisitions in the Southeast, with First Union purchasing Signet Banking for $3.27 billion and NationsBank acquiring Barnett Banks for $15 billion.
  • Crestar Financial, the target of the acquisition, has seen its shares rise more than 20 percent since June 26, closing on Friday at $64, up $2.18 3/4.
  • Upon completion of the merger, Crestar Financial will continue to operate under its current name and management as one of SunTrust's four locally focused bank holding companies.

Statistics:

  • The acquisition deal is valued at $9.5 billion in stock.
  • The combined bank will have an asset base of $88 billion.
  • The merged institution will have a network of 1,093 branches across six states and the District of Columbia.
  • The Virginia-Washington D.C. market is the fourth-largest by population in the country.
  • First Union's acquisition of Signet Banking was valued at $3.27 billion.
  • NationsBank's acquisition of Barnett Banks was valued at $15 billion.
  • Crestar Financial's shares have risen more than 20 percent since June 26.

Sources:

  • Bloomberg News
  • SunTrust Banks press release
  • Keefe, Bruyette & Woods press release
  • Ryan, Beck & Co. press release
  • First Union press release