Fifth Third Bancorp's $10.9bn Acquisition of Comerica
- amansp2006
- 3 hours ago
- 6 min read
By Alexander Svanidze, Ava Singer, Ryan Leo, Julianna Zelnhefer (Boston University); Giuseppe Mazza, Alvaro Aguilada De Nalda (ESADE)
Photo: Eduardo Soares
Overview of the deal
Acquirer: Fifth Third Bancorp
Target: Comerica Inc.
Implied Equity Value: $10.9 billion
Total Transaction Size: $10.9 billion
Closed date: Expected Q1 2026
Target advisor: Goldman Sachs (Financial) and Sullivan & Cromwell (Legal)
Acquirer advisor: J.P. Morgan (Lead Financial), Keefe, Bruyette & Woods (Financial) and Wachtell, Lipton, Rosen & Katz (Legal)
Fifth Third Bancorp (NASDAQ: FITB) acquires 100% of Comerica Inc. (NYSE: CMA) in an all-stock deal valued at $10.9 bn. The deal is anticipated to close by Q1 2026, following regulatory and shareholder approval.
The official company statements announced that Comerica shareholders will receive 1.8663 shares of Fifth Third for each Comerica share. Fifth Third will own 73% of what after the deal is the ninth-largest U.S. bank with $288 bn In assets, while Comerica shareholders will hold the remaining 27%.
Comerica has been trading at a discount following regional bank volatility in 2023 and increased scrutiny over smaller U.S. players, Comerica’s Market Capitalization made an all-stock transaction even more attractive for Fifth Third. For this reason, Fifth Third is solely relying on this equity to fund the transaction, maintaining capital flexibility and preserving balance-sheet strength, often affected by incremental debt or cash issuance to fund acquisitions. Management’s expectations are for the deal to be immediately accretive to earnings, generating significant cost synergies, by consolidating overlapped operations and scaling efficiencies regarding regulatory and compliance functions.
By acquiring Comerica, Fifth Third seeks to expand its geographical and business reach to boost its growth. The acquisition will allow Fifth Third’s to combine its retail and digital banking capabilities with Comerica’s middle-market commercial banking franchise, strengthening its position and expanding in high growth markets, including Texas and California. The deal takes part in the greater consolidation trend recently appearing in the U.S. regional banking sectors, as these players seek greater scalability and diversification of both their business models and operating regions.
“Comerica’s strong middle market franchise and complementary footprint make this a natural fit. Together, we are creating a stronger, more diversified bank that is well-positioned to deliver value for our shareholders, customers, and communities – starting today, and over the long-term.” - Tim Spence, Chairman and CEO of Fifth Third Bancorp
Company Details (Acquirer - Fifth Third Bancorp)
Headquartered in Cincinnati, Ohio, and with operations primarily in the Midwest and Southwest, Fifth Third Bancorp provides a wide range of financial services, such as wealth and asset management, consumer lending, retail banking, and services to small and medium sized corporate clients. The bank's ability to combine a robust regional branch network with investments in digital channels and payments makes it a locally orientated bank with capabilities at the national level.
Founded in 1858, headquartered in Cincinnati, Ohio (USA)
CEO: Timothy N. Spence
Number of employees: 18,600
Market Cap: $28.18 bn (as of 16/11/2025)
EV: $43.13 bn
LTM Revenue: $8.13 bn
LTM EV/Revenue: 5.4x
Company Details (Target - Comerica)
Comerica Bank is a large regional bank known for its commercial banking. It focuses on serving midsized corporations and high net worth individuals with key products and services being commercial lending, industry specific banking, and wealth management services. Comerica's major operations include over 430 banking centers in Texas, California, Michigan, Arizona, and Georgia. Prior to the acquisition, Comerica was a publicly traded company. They are in the top twenty five largest U.S. banking companies.
Founded in 1849, headquartered in Dallas, Texas
CEO: Curtis C. Farmer
Number of employees: 7,927
Market Cap: $10.7bn
EV: $9.98bn
LTM Revenue: $3.34bn
LTM EBITDA: N/A
LTM EV/Revenue: 2.99x
LTM EV/EBITDA: N/A
Projections and Assumptions
Short-Term Consequences
The acquisition of Comerica Incorporated by Fifth Third Bancorp, valued at approximately US$10.9 billion, will create the ninth-largest banking institution in the United States, with combined assets of about US$288 billion and consolidated deposit base of approximately US$224 billion. It is estimated that the transaction will expand Fifth Third by nearly 20% in branch locations, thus strengthening its physical presence in key markets including Dallas, Detroit, and California and making the firm a well-known regional player. Comerica shareholders will hold 27% of the merged company, effectively aligning ownership with long-term value creation.
Financially, the deal is expected to deliver short-term EPS accretion, supported by estimated annual cost synergies of about US$850 million, about 35% of the total expense base at Comerica. Branch consolidation, technology integration, and streamlining of overlapping back-office functions are the major sources of these synergies. The management expects one-off integration expense of about US$300million in the initial post-closing year, which may damp accretion in the early years.
About 7,500 Comerica workers will be transferred to Fifth Third, with the acquiring company retaining key relationship-management and credit-management staff to ensure client retention. The leadership integration will follow a hybrid model with the executives of Comerica becoming part of the management structure and board of directors of the Fifth Third bank to facilitate a smooth transition.
Stocks of Comerica rose by 14% in the aftermath of the announcement, a response that matched the 20% acquisition premium, but Fifth Third shares declined by about 1% as investors balanced integration costs against long-term synergies. Regulatory clearance is expected in 2025, full operational integration in the first quarter of 2026; short-term disruptions will be minimal, as the business lines are complementary and align in strategy.
Long-Term Upsides
Fifth Third Bancorp's acquisition of Comerica marks a significant strategic move to accelerate the firm's long-term growth plan and geographic reach.
The acquisition accelerates Fifth Third’s long-term growth strategy by combining its award-winning retail and digital banking platform with Comerica’s strong middle-market banking franchise. The combined entity will operate in 17 of the 20 fastest-growing U.S. markets, deepening Fifth Third’s commercial capabilities, especially in the Southeast, Texas and California. For Comerica, the transaction offers a broader range of markets and enhanced capabilities to serve its clients more effectively. The combined bank is positioned to create value for shareholders, customers and communities over the long term.
The combined entity will hold $288 billion in assets, forming the 9th largest bank in the US. By 2027, the projected EPS accretion is ~9%, assuming fully phased-in expense synergies, meaning the acquisition has a positive long-term impact on earnings. As for ESG, Fifth Third has an existing $100 billion environmental & social finance target through 2030. The acquisition's implication of geographical expansion could scale its sustainable-finance programs. Considering realisation of cost/synergies, revenue synergies aren’t included in the base IRR, but potential upside exists through cross-selling and expanded commercial and wealth-management offerings, subject to execution and integration risk.
Risks and Uncertainties
Due to the shifting regulatory environment Comerica’s competitive position is strengthened. These benefits will take time to materialize and may be tempered by the complexity of integrating Comerica’s commercially focused franchise with Fifth Third’s retail focus. Comerica’s identity as a middle-market lender with limited retail density stands in contrast to Fifth Third’s consumer-oriented model. Reconciling these two operating models without weakening either bank’s competitive edge could prove challenging, particularly as Comerica transitions into a much larger, more retail-heavy organization.
Financially, the all-stock transaction exposes both institutions to market volatility and shifts valuation risk onto Fifth Third’s share price. While the deal avoids incremental debt, the combined bank’s enlarged balance sheet increases the urgency to deliver synergies in a regional banking environment still recovering from the 2023 crisis and recent scrutiny over credit risks. If credit conditions deteriorate, the merged entity could experience enhanced liquidity pressure and slower loan growth.
On the regulatory front, although bank consolidation is benefiting from a looser regulatory environment, a merger of this size still requires approval from multiple federal regulators. Heightened post-crisis scrutiny around financial stability, competitive impacts in key Midwest MSAs, and consumer access could result in extended reviews. Any delays would slow Fifth Third’s planned expansion timeline and postpone the integration of Comerica’s commercial platform into its broader retail and wealth strategy.
“The shifting regulatory environment has gotten more conducive to M&A, and we saw windows starting to open where there might be a chance for us to consider partnering with another institution." - Larry Farmer, CEO of Comerica