Another Bank Tried to Buy Comerica Before Fifth Third Deal
A recent regulatory filing released Wednesday provides deeper insight into how the megamerger between Comerica and Fifth Third Bancorp was structured. The disclosure also details the compensation agreement for Comerica CEO Curtis Farmer, who will transition to the role of Fifth Third's vice chair.
According to the updated filing and recent proxy documents from both banks, Comerica decided to pursue a sale and identified Fifth Third as the ideal buyer. Although another bank made an offer in September, Comerica’s board determined that Fifth Third would be "the optimal merger counterparty," as noted in the Wednesday night filing.
The two institutions ultimately agreed to a deal valued at nearly $11 billion — the largest bank acquisition announced so far this year.
How the Deal Began
The merger discussions began with a phone call. Comerica CEO Curt Farmer contacted Fifth Third CEO Tim Spence on September 18 to indicate that Comerica was open to selling and asked whether Fifth Third would be interested. Spence traveled to Dallas the very next day to continue the talks.
This conversation occurred a little more than a week after the two executives had previously spoken. Farmer had called Spence earlier to congratulate him on securing a government contract that made Fifth Third the financial agent for a U.S. prepaid debit card program previously handled by Comerica.
Negotiations and Agreement
The banks negotiated the terms over roughly two and a half weeks, finalizing the agreement on October 5 and publicly announcing it the following day. The merger marks another major step in the ongoing consolidation trend within the U.S. banking sector.
The filing described Fifth Third as "the optimal merger counterparty."
Author’s Summary
The merger between Comerica and Fifth Third, formed after a brief but strategic negotiation process, stands as the largest U.S. banking acquisition announced this year.