Benzinga | Dec 13, 2020 10:31PM EST

Huntington Bancshares, TCF Financial Near Merger Deal: WSJ

Huntington Bancshares Inc (NASDAQ:HBAN) and TCF Financial Corporation (NASDAQ:TCF) are nearing a merger deal, the Wall Street Journal reported Sunday.

What Happened: The merger agreement -- the latest in a series of regional-bank amalgamations -- is likely to be announced Sunday, the Journal reported.

The two companies are reportedly negotiating an all-stock deal that would put the value of the Detroit-based TCF at almost $6 billion, about 11% above its current share price. The Columbus, Ohio-based Huntington has a market value of $13 billion.

"This merger is an ideal opportunity; it bolsters both of us," said Huntington Chairman Stephen Steinour, as per the Journal. "We'll be able to do things together that neither of us could do independently."

Steinour, also a director at L Brands, Inc (NYSE:LB), was awarded the 2020 Outstanding Leadership Award on Oct. 18 during a virtual event by the Yeshiva Beth Yehudah -- a 105-year old Jewish educational institution based in Michigan.

Why It Matters: Post-merger, the combined entity would have $170 billion in assets and a geographic span ranging from Pennsylvania to Arizona with a strong presence in the Midwest, particularly Illinois and Michigan, according to the Journal.

The merger would reportedly also propel Huntington close to its rivals Fifth Third Bancorp (NASDAQ:FITB) and KeyCorp (NYSE:KEY), which have about $200 billion and $170 billion in assets, respectively.

The combined company will have headquarters in both Detroit and Columbus, according to Steinour.

Regional banks have been consolidating to bolster themselves against competition posed by banking giants such as JPMorgan Chase & Co (NYSE:JPM) and Bank of America Corp (NYSE:BAC), the Journal noted.

In October, First Citizens BancShares Inc (NASDAQ:FCNCA) and CIT Group Inc (NYSE:CIT) had announced a merger. The following month, PNC Financial Services Group Inc (NYSE:PNC) said it was buying the Spanish bank Banco Bilbao Vizcaya Argentaria SA's (NYSE:BBVA) U.S. business.

Price Action: Huntington shares closed nearly 0.8% lower at $12.93 on Friday and fell 0.23% in the after-hours session. On the same day, TCF Financial's shares closed 2.5% lower at $34.78.

See Also: BB&T, SunTrust Announce Merger To Create Sixth-Largest US Bank

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