The merger will form a premier Midwestern bank, operated by the Old National Bancorp, with combined assets valuing $45bn
Old National Bancorp and First Midwest Bancorp have reached a merger agreement to combine in an all-stock merger of equals transaction valued at $6.5bn.
Under the terms of the agreement, First Midwest stockholders are expected to receive 1.1336 shares of Old National common stock for each share of First Midwest common stock held.
Unanimously approved by the Boards of Directors of both companies, the merger will result in forming a premier Midwestern bank with combined assets valuing $45bn.
The new combined company is planned to operate under the Old National Bancorp and Old National Bank names and will be based in Evansville, Indiana and Chicago, Illinois.
Also, the combined entity will create the sixth-largest bank headquartered in the Midwest. It will focus on consumer, wealth management and commercial banking services.
The deal is expected to be completed in late 2021 or early 2022, subject to customary closing conditions, including regulatory and shareholder approvals.
As part of the merger, First Midwest Bancorp chairman and CEO Michael Scudder will be appointed as the executive chairman.
Old National Bancorp chairman and CEO Jim Ryan will continue his current role as CEO.
The combined company will have 16 directors on its board, comprised of eight directors each from Old National and First Midwest.
Scudder said: “First Midwest and Old National are two relationship-focused financial institutions that have rich histories, extremely compatible cultures and a shared commitment to helping our clients achieve financial success.
“As a combined organisation, we will be in an even stronger position to invest, grow and innovate in talent, capabilities and services that will enhance an already superior client experience and further set us apart as a market leader not only in Chicago but across the Midwest.”
Keefe, Bruyette & Woods, A Stifel Company, served as exclusive financial advisor and Squire Patton Boggs (US) as legal advisor to Old National on the transaction.
J.P. Morgan Securities served as exclusive financial advisor and Sullivan & Cromwell as legal advisor to First Midwest.