Comerica's Sale and Merger with Fifth Third Bancorp
A regulatory filing on Wednesday revealed details about the formation of a major bank megamerger and the compensation plan for Comerica CEO Curtis Farmer, who will become vice chair of Fifth Third Bancorp.
Initial Interest and Decision
After deciding to sell, Comerica, a Dallas-based bank with $77 billion in assets, considered offers from multiple buyers. In September, another bank proposed a deal, but Comerica’s board ultimately chose Fifth Third as the “optimal merger counterparty,” according to a public filing made Wednesday night.
The Merger Agreement
The two banks agreed on a deal valued at nearly $11 billion, marking the largest bank acquisition announced so far this year.
Key Conversations Leading to the Merger
The merger process began with a phone call on September 18, when Comerica CEO Curt Farmer reached out to Fifth Third CEO Tim Spence to explore a potential sale. Spence traveled to Dallas the following day to continue discussions.
This conversation followed another call just over a week earlier, in which Farmer had congratulated Spence on Fifth Third’s recent contract win. Fifth Third had replaced Comerica as the financial agent for a U.S. government prepaid debit card program.
Negotiation Timeline
- September 18: Initial call discussing potential sale
- Following two and a half weeks: Negotiations between the banks
- October 5: Agreement signed
- October 6: Public announcement of the merger
“Fifth Third would be the optimal merger counterparty,” said Comerica’s board in the regulatory filing.
Curtis Farmer’s role will shift as he becomes vice chair of Fifth Third Bancorp following the merger.
Author's Summary
The $11 billion merger between Comerica and Fifth Third Bancorp was finalized after careful selection and negotiations, highlighting strategic leadership and significant financial moves in the banking industry.