Fifth Third Dips on $10.9B Comerica Takeover
Shares of the acquirer fall, a typical reaction to large-scale mergers, as investors weigh execution risks of the all-stock deal.
Fifth Third Bancorp (FITB) shares traded down approximately 2% following the announcement of its definitive agreement to acquire Comerica (CMA) in an all-stock transaction valued at $10.9 billion. The deal, one of the most significant in the regional banking sector in recent years, aims to create a financial powerhouse in the U.S. market.
Under the terms of the merger, Comerica shareholders will receive 1.8663 shares of Fifth Third stock for each share of Comerica they hold. This represents a 20% premium to Comerica's 10-day volume-weighted average stock price as of October 3, 2025. The pro forma bank will be the ninth-largest in the U.S., with approximately $288 billion in assets and a footprint in 17 of the nation's 20 fastest-growing markets.
The initial negative stock reaction for an acquiring company is not uncommon in large mergers, as investors often harbor concerns about the complexities of integration and the costs associated with such a large-scale transaction. While Fifth Third's stock dipped, on the news, reflecting the premium offered in the acquisition.
Analysts have generally responded positively to the strategic rationale behind the deal. In a note to clients, TD Cowen analyst Steven Alexopoulos called the deal “one of the most financially attractive bank transactions that we’ve seen in decades.” The acquisition is expected to bolster Fifth Third's presence in key growth markets like Texas and California, and create two high-return fee businesses in Commercial Payments and Wealth & Asset Management, each generating $1 billion in revenue.
Despite the initial dip, the long-term prospects of the combined entity are viewed favorably. The deal addresses Comerica's funding constraints and comes after pressure from activist shareholder HoldCo Asset Management to explore a sale. The merger is expected to close by the end of the first quarter of 2026, and will be closely watched by investors and the broader financial industry.