Published On: Sat, Feb 16th, 2019

US bank holding companies Chemical Financial and TCF sign $3.6bn merger

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Banking acquisition news : Chemical Financial, the Michigan-based bank holding company which owns the Chemical Bank has signed an all-stock deal worth $3.6 billion to acquire Minnesota-based TCF Financial, the parent company of TCF Bank.

TCF will merge into Chemical Financial, as per the terms of the deal. The enlarged bank holding company and bank will operate post-merger under the TCF name and brand.

The merger will result in a premier Midwest bank, which will be headquartered in Detroit with considerable operating presence in Minneapolis, Midland, and Chicago. The combined bank holding company will boast of around $45 billion in assets and $34 billion in total deposits.

Under the merger terms, TCF shareholders will receive 0.5081 of Chemical Financial shares for each TCF share, valued at $21.58.

The transaction will combine the two complementary banking platforms, bringing together more than 500 bank branches across nine states under one umbrella. The combined bank holding company will have presence in four of the top 10 Midwest markets.

Corporate building of TCF Bank

Corporate building of TCF Bank. Photo courtesy of Tony Webster from Minneapolis, Minnesota, United States/Wikimedia Commons.

Gary Torgow – Chemical Financial Chairman said: “With a shared strategic vision and increased scale and capabilities, our two complementary banking platforms will be positioned to better serve our customers and communities.

“The combination of TCF and Chemical creates the largest midcap bank in the Midwest, poised to deliver double-digit EPS accretion for each set of shareholders, significant cost synergies, top-tier return metrics, a more diversified balance sheet and a lower risk profile. We also share a deep commitment to supporting and giving back to the communities we serve.”

Also, the new TCF is likely to have a favorable position to take advantage of market opportunities and grow the channels and customers it serves based on the expanded product offerings.

The consolidated banking company will use the strengths of Chemical Bank’s community banking and wealth management capabilities and also TCF’s extensive deposit franchise and know-how in wholesale lending across the US.

Craig Dahl – TCF Chairman, CEO and President said: “We are confident that this merger will enhance our ability to deliver stronger and more sustainable growth and greater value creation than either company could achieve alone. The new TCF will have attractive positions in both its product suite and market footprint as well as a more diversified loan portfolio and increased lending capabilities across asset classes, geographies and industry verticals.

“Through improved profitability and earnings predictability, we will be able to reinvest in the business to drive multiple growth engines, enhance our ability to compete in the next generation of banking and sustain consistent return on capital for shareholders. We believe the combined company will also create new opportunities for our employees and enable us to attract and retain top talent.”

Upon completion of the merger, which is expected in the late Q3 2019 or early Q4 2019, shareholders of TCF will hold stake of 54% while Chemical Financial will hold the remaining stake of 46% in the new TCF.

The closure of the deal is subject to certain closing conditions including the required regulatory approvals and shareholders’ approval for both the companies.

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