(Reuters) - Huntington Bancshares (NASDAQ:HBAN) Inc has agreed to buy TCF Financial (NASDAQ:TCF) Corp for $6 billion in stock, marking the latest tie-up among U.S. regional lenders seeking scale.
Columbus, Ohio-based Huntington will exchange 3.0028 of its shares for each TCF share, equating to a price of $38.83, the bank said in a document published on Monday.
Shares in Detroit-headquartered TCF were 3.5% higher at $36.01, while Huntington's stock slipped 5% to $12.27 after news of the deal, which was announced in a joint statement on Sunday.
"It's a great fit for us," Huntington Chief Executive Stephen Steinour told Reuters, adding the deal would allow it to invest $150 million more in digital and innovation strategies.
Looser financial regulations and lower corporate taxes under the Trump administration have emboldened regional U.S. lenders to pursue deals as they compete with bigger players such as JPMorgan Chase & Co (NYSE:JPM) and Wells Fargo (NYSE:WFC) & Co.
Also spurring tie-ups are low interest rates, which reduce profit from lending, as well as investment in technology.
PNC Financial Services Group Inc (NYSE:PNC) last month bought the U.S. business of Spain's BBVA (MC:BBVA) for $11.6 billion, while Truist Financial (NYSE:TFC) Corp, now the sixth-largest U.S. bank by assets, was created last year by a merger of BB&T Corp and SunTrust Banks Inc (NYSE:STI).
The new combination, centered on Ohio and Michigan, will operate under the Huntington brand and have around $168 billion in assets, making it a top-15 U.S. bank by that measure.
The deal gives Huntington entry into the Minneapolis and Denver metro areas, as well as a bigger Chicago presence.
Steinour, who will be chairman, president and CEO of the combined holding company, said talks began in late-October and the deal is expected to close in the second quarter of 2021.
Huntington was advised by Goldman Sachs (NYSE:GS) and Wachtell Lipton, Rosen & Katz. Keefe, Bruyette & Woods and Simpson Thacher & Bartlett assisted TCF.