On Monday, Fifth Third Bancorp and MB Financial announced they have entered into a definitive merger agreement.
Fifth Third is shelling out $4.7 billion in stocks and cash to buy out MB Financial’s shareholders and complete the merger.
Based on Fifth Third’s stock price as of May 18, MB Financial’s shareholders will receive $54.20 of total consideration for each of their shares in the company. This will consist of 1.45 shares of Fifth Third common stock, and $5.54 in cash per share. This represents a roughly 24% premium on Fifth Third's stock price as of May 18.
MB Financial has been based in Chicago for more than 100 years, and while it announced in mid-April that its national mortgage origination arm is closing, its Chicago-area operation will continue to remain intact and operational.
“Teaming up with Fifth Third allows us to leverage our complementary capabilities for the benefit of our customers and the communities we serve,” MB Financial President and CEO Mitchell Feiger said in a statement.
“I am very excited to lead the combined organization in Chicago. Our commercial expertise and strong credit culture complement the strengths of Fifth Third in large corporate lending, capital markets, wealth management and the payments business. Both organizations are committed to a successful integration, he added.”
In conjunction with the closing of the transaction, two members of MB Financial’s Board of Directors are expected to join the Fifth Third Bancorp Board.
Fifth Third has been investing in Chicago lately, pouring $1.9 billion into the Chicago-area over the last two years. According to the release, Fifth Third will double-down on Chicago, and invest even more in the near future.
“There were no other potential partners of the same caliber as MB Financial in the Chicago market, and we are very pleased to reach an agreement to merge our companies,” Fifth Third Bancorp Chairman, President and CEO Greg Carmichael said in a statement.
“We view MB Financial as a unique partner in our efforts to build scale in this strategically important market. Customers of both banks will benefit from greater convenience and the complementary capabilities that our banks, together, can offer.”