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April 21, 2021

Banking market weekly snapshot: deals swing the other way with a boost in acquisitions

By Hannah Wright

From 11 April 2021 to 17 April 2021, there were 25 deals across the banking sector, representing an increase from the previous weeks total of 18. Of the deals, there were 19 acquisitions, 4 mergers and 2 asset transactions.

On 12 April, Texas-based Cadence Bancorp, a regional bank, entered into an agreement to merge with BancorpSouth Bank, a provider of financial solutions for banking, checking, credit cards, and mortgages for $2.8bn.

The companies will combine in an all-stock merger with a total market value of more than $6bn to create a Texas and South-eastern regional bank.

Under the terms of the agreement, which was unanimously approved by the Boards of Directors of both companies, Cadence shareholders will receive 0.70 shares of BancorpSouth for each share of Cadence they own.

Dan Rollins, who will become the chairman and CEO of the combined firm, commented: “Cadence has built an impressive commercial banking franchise that when combined with the strengths of our team at BancorpSouth seems to be a perfect fit.

The merger will allow BancorpSouth to expand its reach and offering with minimal overlap in its existing branch network.

Rollins continued: “Mergers are all about people, and what’s important to note here is that our leadership teams are in sync. By joining forces, it’s easy to see that we’ll be able to make a significant impact on our customers and communities while driving long-term shareholder value.”

The merger is expected to close in the fourth quarter of 2021, subject to closing conditions.

Also in the US, New Residential Investment Corp, a public real estate investment trust, entered into a definitive agreement to acquire Caliber Home Loans on 14 April for $1.675bn

New Residential will acquire 100% of Caliber, a home mortgage originator and servicer, from Lone Star Funds, an American private equity firm.

The acquisition is to be financed through a mix of existing cash and available liquidity on the New Residential and Caliber combined balance sheet as well as a mix of equity and the sale of certain investment securities.

The transaction is intended to close in the third quarter of 2021 subject to closing conditions.

Further north, Ameriprise Financial signed a definitive agreement to acquire the EMEA Asset Management Business from Bank of Montreal for $845m on 12 April 2021. The asset is a Canadian company that offers wealth management, personal and commercial banking, and capital market solutions. The transaction is expected to close in the fourth quarter of 2021.

Across the pond, in Norway’s biggest bank, DNB announced an all-share offer for 100% stake in Sbanken for NOK11.1bn ($1.32bn) on 15 April.

DNB believes that Sbanken will further strengthen its position within retail banking in its home market.

In a recommended voluntary offer, DNB will pay NOK103.85 for each share of Sbanken, which represents a 29.8% premium over Wednesday’s closing price of NOK80.

The offer price will be reduced by the amount of any dividend or other distributions made by Sbanken. The offer document is expected to be approved during the week commencing 19 April 2021. The offer may only be accepted on the basis of the offer document.

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