Comerica Received a Deal Offer Prior to Fifth Third
The ongoing discussions surrounding bank mergers often reveal an intriguing story. Notably, Comerica has been in the spotlight due to its recent acquisition proposal from Fifth Third Bank.
Background on the Acquisition Offer
Prior to receiving a lucrative offer from Fifth Third Bank, Comerica was approached by another entity, referred to as Financial Institution A. This initial proposal occurred in September 2023 and involved a potential all-stock transaction. However, Comerica’s board deemed the proposed terms insufficient compared to offers potentially available from other parties.
The Fifth Third Proposal
Fifth Third Bank entered the conversation later, despite not having made an initial offer. Comerica’s CEO, Curt Farmer, and Fifth Third’s CEO, Tim Spence, had casual discussions regarding industry trends over the years. Their professional connection deepened when Farmer congratulated Spence on Fifth Third’s recent acquisition of the Direct Express prepaid-card program.
Key Timeline of Events
- September 2023: Financial Institution A proposes an all-stock transaction with Comerica.
- September 18, 2023: Farmer contacts Spence to discuss potential collaboration.
- September 19, 2023: Spence and Farmer meet in Dallas.
- Two business days later: Comerica’s board favors Fifth Third as the optimal merger partner.
The Proposed Transaction Details
Fifth Third ultimately offered $10.9 billion for Comerica. This deal is projected to finalize in the first quarter of 2025, marking it as one of the most significant banking transactions of the year.
Future Plans for Comerica’s CEO
Following the completion of the merger, Curt Farmer will transition to a vice chair position at Fifth Third. His annual compensation will be $8.75 million, along with an additional $10 million payout contingent upon the deal’s completion and subsequent integration.
Compensation Breakdown
| Details | Amount |
|---|---|
| Annual Compensation as Vice Chair | $8.75 million |
| Cash Bonus for Integration | $10 million |
| Deferred Compensation | $10.63 million |
Farmer’s packages and benefits include an executive office and support for travel expenses, ensuring his transition to Fifth Third is smooth and beneficial.
Conclusion
The merger discussions between Comerica and Fifth Third reflect a notable shift in the banking industry, highlighting strategic partnerships and financial evaluations. This acquisition could redefine market landscapes as it unfolds.
