Citizens Financial Group in Providence, RI, is buying Investors Bancorp in Short Hills, NJ, in a $ 3.5 billion deal that would give Citizens a top-10 deposit share ranking in metropolitan New York.
With the acquisition, the $ 185 billion-asset Citizens would gain $ 27 billion of assets, $ 20 billion of deposits and 154 branches across the greater New York City area, Philadelphia and New Jersey. The announcement of the deal comes just two after Citizens said it was buying buying 80 East Coast branches from HSBC.
“The acquisition of Investors, following on the heels of the acquisition of HSBC’s East Coast branches, further strengthens our formidable franchise in the Northeast, together adding roughly one million customers and boosting our near and long-term growth potential,” Citizens’ Chairman and CEO Bruce Van Saun said in a press release Wednesday.
For Citizens, the Investors deal would be its first whole-bank acquisition since it was spun off from the Royal Bank of Scotland in 2015. Over the years, Citizens has bought a number of nonbank firms, including a mortgage lender merger-and-acquisition and capital markets advisory shops, that would add to its fee-generating businesses.
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Under the terms of the deal announced Wednesday, Investors ‘shareholders would receive 0.297 of a share of Citizens’ common stock and $ 1.46 in cash per share of Investors they own. The merger is expected to be immediately accretive to earnings and should add 6.4% to Citizens’ 2023 earnings per share.
Key members of the Investors management team would join Citizens after the deal closes. Kevin Cummings, Investors’ chairman and CEO, and Michele N. Siekerka, both currently members of Investors’ board of directors, are expected to join Citizens’ board of directors.
“Citizens shares Investors’ deep commitment to serving customers, supporting colleagues and giving back to local communities,” Cummings said in the press release. “Our local-market expertise and personal touch will align well with Citizens’ approach and together we will drive long-term value for all our stakeholders.”
The deal is expected to close in the first or second quarter of 2022.
Morgan Stanley & Co. LLC acted as financial advisor to Citizens and Sullivan & Cromwell, LLP served as legal advisor. Keefe, Bruyette & Woods, served as lead financial advisor. Piper Sandler & Co. and Lazard also served as financial advisors, and Luse Gorman, PC served as legal advisor to Investors.
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