Chemical Financial and TCF Financial have signed a definitive agreement to merge their banking operations through an all-stock merger of equals transaction.
According to the media sources, the value of the deal is nearly $3.6bn.
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As per the terms of the agreement, TCF will merge into Chemical and the combined entity will operate under TCF brand name.
Details of TCF Financial deal
Based on a fixed exchange ratio, TCF shareholders will receive 0.5081 shares of Chemical common stock against each share.
Following the completion of the deal, the TCF and Chemical shareholders will hold 54% and 46% stakes, respectively, in the combined company.
The merger will create a Midwest bank with $45bn in assets. It will have more than 500 branches across the nine US states.
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By GlobalDataIt will also create an entity which will leverage Chemical’s community banking and wealth management capabilities and TCF’s large deposit and wholesale lending expertise to bolster scale and service portfolio.
The combined firm will be headquartered in Detroit.
TCF chairman, CEO and president Craig Dahl said: “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.
“Through improved profitability and earnings predictability, we will be able to reinvest in the business to drive multiple growth engines, enhance our ability to compete in the next generation of banking and sustain consistent return on capital for shareholders.”
The TCF Financial deal is expected to close late third or early fourth quarter of this year. The completion is subject to customary closing conditions, regulatory and shareholders’ approvals.
