Fifth Third Bancorp Acquires Comerica for $10.9 Billion
After several years of relative inactivity in bank acquisitions, the landscape has been rattled by the news of a significant deal. Cincinnati-based Fifth Third Bancorp has announced its plans to acquire Comerica, a Dallas-based peer, in an all-stock transaction valued at $10.9 billion. This landmark deal marks the largest bank acquisition announcement of 2025, and Fifth Third’s first since 2019.
This strategic acquisition is set to create the ninth-largest bank in the United States, boasting a combined asset total of $288 billion. This move comes after Comerica faced several months of pressure from an activist investor to sell. However, Comerica’s CEO, Curt Farmer, has maintained that this external pressure did not influence the decision to sell.
What the Acquisition Entails
The deal’s announcement was accompanied by the news that the acquisition is expected to close in the first quarter of 2026. Fifth Third Bancorp’s Chairman and CEO Tim Spence expressed that the acquisition will not just complement the bank’s strategic initiatives but will also become its top priority moving forward. He stated, “This is officially the biggest thing we’ve ever done as a company, by any measure.”
The market responded to the news with a surge in Comerica’s stock price, which rose more than 14%. Fifth Third’s stock, however, remained relatively flat after fluctuating in the morning hours following the announcement.
Strategic Benefits of the Deal
The deal will allow Fifth Third to take advantage of Comerica’s commercial portfolios while expanding and using its retail footprint. Both CEOs noted the positive overlap in the companies’ portfolios. Spence stated, “What you get here is a bank that’s going to be really beautifully balanced.”
Spence further highlighted that the acquisition would help the bank to be more granular in commercial banking. Meanwhile, Comerica, which wanted a higher mix of retail funding, would also significantly benefit from the deal.
As part of its growth strategy, Fifth Third Bancorp also announced plans to add at least 150 new branches in Texas over the next four years and later expand its location footprint in California.
Financial Implications of the Acquisition
Fifth Third Bancorp expects to cut Comerica’s noninterest expenses by over one-third, or about $850 million, with the deal. The company also anticipates a 9% earnings per share accretion benefit to 2027 and estimates one-time charges of $950 million.
The acquisition will also involve a $1.7 billion balance sheet restructuring for Comerica’s unrealized losses on its securities portfolio, estimated to be accretive to income over 8.5 years.
Looking to a Post-Merger Future
Once the merger is complete, Fifth Third Bancorp plans to integrate Comerica’s auto dealer floor plan lending business into its existing indirect auto lending business for consumers. Comerica’s life sciences and tech loan portfolio is also seen as a boost for Fifth Third’s embedded payments business.
Despite the significant changes, the CEOs expect limited redundancies due to the complementary nature of the businesses. They also believe that the merger will eliminate conversion risks.
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