Fifth Third tumbles after $4.7B deal to buy Chicago-based bank

Shares of Fifth Third Bancorp, the Cincinnati-based regional bank, tumbled on Monday after agreeing to buy MB Financial in a deal valued at $4.7 billion before the buyer’s stock fell.

Fifth Third is paying a 27% premium compared with Chicago-based MB Financial’s stock price a month ago, The Wall Street Journal reported. The comparable average premium paid in other bank deals since 2015 is 11.5%, according to data provider Dealogic, whose estimates were cited by the newspaper.

The buyer said in a press release that the merger will result in a total Chicago deposit market share of 6.5%, ranking the combined company fourth in total deposits and second in estimated retail deposits among the nearly 200 banks in the Chicago marketplace.

Ticker Security Last Change Change %
FITB FIFTH THIRD BANCORP 42.99 +0.51 +1.20%
MBFI n.a. n.a. n.a. n.a.

“There were no other potential partners of the same caliber as MB Financial in the Chicago market,” Greg Carmichael, CEO of Fifth Third, said in a press release.

The deal requires the approval of regulators and MB Financial shareholders.