BB&T Corporation will acquire National Penn Bancshares in a cash and stock transaction for total consideration valued at approximately $1.8 billion.
Article continues below
This acquisition will significantly expand BB&T's footprint in the Mid-Atlantic region and improve its deposit market share to #4 in Pennsylvania.
National Penn, headquartered in Allentown, Pa., has $9.6 billion in assets, $6.7 billion in deposits and 124 banking offices in Pennsylvania, New Jersey and Maryland.
BB&T plans to establish a fourth community banking region for eastern Pennsylvania, headquartered in Allentown.
BB&T's focus on culture, associates, clients and communities has and will continue to be a critical part of all acquisitions. BB&T plans to continue National Penn's tradition of commitment to its communities by creating a $5 million fund to support ongoing economic development in the greater Lehigh Valley and Berks County communities.
Under the terms of the agreement, which was approved by the board of directors of each company, merger consideration will be approximately $1.8 billion consisting of 70 percent BB&T common stock and 30 percent cash.
National Penn stockholders can elect to receive 0.3206 of a share of BB&T common stock or $13.00 in cash for each share of National Penn common stock, subject to proration such that total consideration will consist of approximately $550 million in cash and approximately 31.6 million BB&T common shares.
The merger consideration is valued at $13.00 per share based on the average closing price of BB&T over the 20 trading days ending on August 17, 2015.
BB&T expects to incur pre-tax merger and integration costs of approximately $100 million and expects to achieve annual cost savings of approximately $65 million (approximately 30 percent of National Penn's non-interest expenses).
BB&T expects this acquisition to be accretive to earnings per share in the first full year excluding one-time charges and expects the transaction to exceed its IRR hurdle.
This acquisition is subject to customary closing conditions including regulatory approvals and approval by National Penn shareholders. The transaction is expected to close in mid-2016. ■