US-based BB&T and SunTrust Banks have signed a definitive agreement to merge their banking operations to create the sixth-largest lender in the country.

The two banks will merge in an all-stock merger of equals valued at nearly $66bn.

BB&T-SunTrust Banks merger

As per the terms of the agreement, SunTrust shareholders will receive 1.295 BB&T shares for each SunTrust share they hold.

BB&T shareholders will own around 57% of the combined entity, while SunTrust shareholders will hold the remaining 43% stake.

BB&T chairman and CEO Kelly King said: “This is a true merger of equals, combining the best of both companies to create the premier financial institution of the future.

“It’s an extraordinarily attractive financial proposition that provides the scale needed to compete and win in the rapidly evolving world of financial services.”

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The combined firm will have around $442bn in assets, $301bn in loans and $324bn in deposits. A new corporate headquarters of the lender will also be established at Charlotte in North Carolina.

King will serve as the chairman and CEO of the merged entity, while SunTrust chairman and CEO William Rogers, Jr. will be the president and COO of the company.

Rogers, Jr., said: “With our geographic position, enhanced scale and leading financial profile, these two companies will achieve substantially more for clients, teammates, associates, communities, and shareholders than we could alone.”

The merger is expected to deliver approximately $1.6bn in annual net cost synergies by 2022.

The BB&T-SunTrust Banks merger is expected to close in the fourth quarter of this year, subject to variety of closing conditions including regulatory and shareholders’ approvals.