Diversified financial services company Fifth Third Bancorp has agreed to acquire fellow regional bank Comerica for US$10.9 billion (A$16.5 billion) in an all-stock deal that will create the ninth-largest United States bank with assets of $288 billion.
Under the terms of the deal – which is expected to finalise in the first quarter of 2026 - Comerica stockholders will receive 1.8663 Fifth Third shares for each Comerica share they own.
The transaction’s value stems from Fifth Third’s closing price from Friday of $82.88, which is a 20% premium to Comerica’s 10-day volume-weighted average stock price.
When the deal closes, Fifth Third shareholders will own around 73% of the combined company, while Comerica investors will hold 27%.
“Joining with Fifth Third – with its strengths in retail, payments and digital – allows us to build on our leading commercial franchise and further serve our customers with enhanced capabilities across more markets,” noted Comerica CEO Curt Farmer.
Fifth Third CEO Tim Spence described the tie-up as a pivotal moment that accelerated the bank’s plans to build density in high-growth markets and deepen its commercial capabilities.
“The things that have defined Fifth Third over the course of the past 10 years have been this focus on stability, profitability and our ability to drive organic growth,” said Spence in an interview on Monday.
“What’s defined Comerica is an incredible middle-market commercial banking platform, and the access that Comerica has to high growth markets like Texas and large economies like California.”
Monday’s deal puts Fifth Third on track to achieve top-five market share in the Southeast, Texas and California, and increases the bank’s middle-market sales force by 20%.
With the aid of Comerica’s strong middle market franchise, Spence told the market that Fifth Third plans to create a stronger, more diversified bank that is well-positioned to deliver value for shareholders, customers, and communities.
Plans to open 150 new branches in Texas by 2029 will see Fifth Third become among the top three in market share in Dallas, Houston and Austin.
“In an environment where merger approvals are coming faster, it builds our confidence,” Spence said.
“Regulators believed we had the capacity to run a much larger bank.”
Texas has been one of the most targeted states for bank M&A activity this year.
Fifth Third’s Ohio rival Huntington announced in July it would buy Dallas-based Veritex Holdings for $1.9 billion.
Kalispell, Montana-based Glacier Bank is acquiring Mount Pleasant-based Guaranty Bancorp in a $476.2 million deal, and Denver-based National Bank Holdings is buying Dallas-based Vista Bancshares for $369.1 million.
Comerica shares rallied around 15% in early trading following the announcement on Monday, while Fifth Third traded slightly lower.
The SPDR S&P Regional Banking ETF (KRE) jumped 1% in premarket trading on expectations that this deal will be the start of many more in the regional banking space as the Trump administration and Republicans ease regulations and takeover scrutiny.
