The acquisition will support Citizens Financial's operations in the greater New York City, Philadelphia metropolitan area and New Jersey
Citizens Financial Group has agreed to acquire Investors Bancorp in a stock and cash transaction valued at around $3.5bn.
Under the terms of the merger agreement, Investors’ shareholders are eligible to receive 0.297 shares of Citizens’ common stock and $1.46 in cash for each share of Investors held.
Upon closing of the transaction, former Investors shareholders will collectively own around 14% stake in the combined company.
Citizens chairman and CEO Bruce Van Saun said: “The acquisition of Investors, following on the heels of the acquisition of HSBC’s East Coast branches, further strengthens our formidable franchise in the northeast, together adding roughly one million customers and boosting our near and long-term growth potential.
“We are confident in our ability to successfully integrate these acquisitions, and to over time deliver the same attractive offerings to customers and strong financial performance in the New York City metro region and New Jersey as we do in other major metro areas we serve.”
The acquisition of Investors is expected to enhance Citizens’ banking franchise and add an attractive middle-market or small business and consumer customer base.
Also, it will strengthen the firm’s presence in the northeast with the addition of 154 branch locations in the greater New York City, Philadelphia metropolitan areas and across New Jersey.
Citizens said that the transaction complements its recently announced acquisition of HSBC East Coast branches and national online deposits.
The acquisition is expected to close in the first quarter of 2022.
Morgan Stanley served as a financial advisor and Sullivan & Cromwell as a legal advisor to Citizens on the transaction.
Keefe, Bruyette & Woods, A Stifel Company served as a lead financial advisor, Piper Sandler & Co., Lazard as financial advisors and Luse Gorman served as a legal advisor to Investors.
Investors chairman and CEO Kevin Cummings said: “Joining Citizens, with its broad capabilities, scale and commitment to excellence in customer service opens exciting opportunities for our combined company.
“Citizens shares Investors’ deep commitment to serving customers, supporting colleagues and giving back to local communities.
“Our local-market expertise and personal touch will align well with Citizens’ approach and together we will drive long-term value for all our stakeholders.”