Comerica's Acquisition Negotiations
A recent filing revealed the timeline and details surrounding Comerica's merger discussions, highlighting a swift negotiation process and some short-term benefits for Comerica CEO Curt Farmer.
Earlier Deal Offer Prior to Fifth Third
Before Fifth Third proposed a tie-up with Comerica, another company, referred to as Financial Institution A, made a verbal offer in September. This potential all-stock transaction was considered by Comerica's board but ultimately seen as less attractive than alternatives.
“The board determined the terms were not likely to be more attractive than the consideration that could be offered by another counterparty.”
Fifth Third Emerges as Preferred Partner
The board decided that Fifth Third would be the best partner for a business combination if their proposal fairly valued Comerica. Before making a formal offer, Fifth Third had not yet presented terms but engaged in ongoing discussions with Comerica’s CEO.
“Fifth Third would be the optimal merger counterparty to a business combination transaction if Fifth Third were to make a proposal which appropriately valued Comerica.”
Comerica CEO Curt Farmer and Fifth Third CEO Tim Spence have intermittently discussed financial trends over the years, setting the stage for the eventual offer.
Comparison with Other Bank Deals
Unlike more drawn-out negotiations such as Capital One’s six-month pursuit of Discover, which involved multiple offers and pauses in talks, the Comerica-Fifth Third discussions lacked intense drama and proceeded relatively quickly.
Summary
The acquisition talks between Comerica and Fifth Third moved swiftly, with an earlier offer from another institution declined in favor of Fifth Third, whose CEO relationship with Comerica’s leader helped facilitate a valued partnership.
Author’s summary: Comerica chose Fifth Third as its merger partner after a brief negotiation period and a prior offer from another financial institution was deemed less beneficial.
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