Michigan-based Chemical Financial, the owner of Chemical Bank, has agreed to acquire rival US bank holding company TCF Financial, the owner of TCF Bank, in an all-stock deal worth $3.6bn.
Image: Chemical Financial and TCF Financial announce $3.6bn worth merger. Photo: courtesy of rawpixel/Unsplash.com.
As per the agreement terms, the Minnesota-based TCF will merge into Chemical. The combined holding company and bank will operate under the TCF name and brand after completion of the merger.
By combining two complementary banking platforms, the merger will result in a new Midwest bank having over 500 branches in nine states, which includes four of the top 10 Midwest markets.
It will be headquartered in Detroit and have a significant operating footprint in Minneapolis and also in Midland and Chicago.
The combined bank holding company is expected to have a unique position to leverage on market opportunities and expand the channels and customers it serves owing to larger scale and increased product offerings. It will hold nearly $45bn in assets, $34bn in total deposits.
The enlarged bank holding company is expected to utilize the strengths of Chemical’s community banking and wealth management capabilities along with TCF’s huge deposit franchise and expertise in wholesale lending.
Chemical chairman Gary Torgow said: “The combination of TCF and Chemical creates the largest midcap bank in the Midwest, poised to deliver double-digit EPS accretion for each set of shareholders, significant cost synergies, top-tier return metrics, a more diversified balance sheet and a lower risk profile.”
As per the merger terms, TCF shareholders will be issued 0.5081 shares of Chemical common stock for each share they hold in TCF. Following the completion of the merger, the current shareholders of TCF and Chemical will own stakes of 54% and 46%, respectively in the combined company.
TCF chairman, CEO and president Craig Dahl said: “We are confident that this merger will enhance our ability to deliver stronger and more sustainable growth and greater value creation than either company could achieve alone.
“The new TCF will have attractive positions in both its product suite and market footprint as well as a more diversified loan portfolio and increased lending capabilities across asset classes, geographies and industry verticals.”
The merger is slated to be completed in the late third or early fourth quarter of this year. It will be subject to meeting of customary closing conditions such as receipt of customary regulatory approvals and approval from shareholders of the two bank holding companies.