Fifth Third to buy Comerica for $10.9 billion in a deal that will make it the 9th largest bank in the U.S.

Core Insights - Fifth Third Bank has agreed to acquire Comerica for $10.9 billion, pending regulatory approval, which would create the 9th largest bank in the U.S. with $288 billion in assets [1] - The all-stock transaction aims to enhance Fifth Third's competitiveness against larger banks while expanding its presence in the Southeast and Southwest regions [1][2] - The merger is part of a trend of increasing bank consolidation following a mini banking crisis in 2023, highlighting the need for banks to achieve competitive scale [3][6] Company Performance - Comerica's stock rose 14% in early trading following the announcement, maintaining a similar increase for the year, while Fifth Third's stock fell approximately 1% but is up 5% year-to-date [2] - Fifth Third's CEO emphasized the strategic importance of this merger to build density in high-growth markets and enhance commercial capabilities [2][3] Industry Context - The merger is the largest among several notable bank deals in 2023, including PNC Bank's acquisition of FirstBank for $4.1 billion and Pinnacle Financial Partners' agreement to acquire Synovus for $8.6 billion [4][5] - The pressure on Comerica to sell its franchise was exacerbated by an activist investor's report urging the bank to consider acquisition opportunities [6] - Comerica's CEO acknowledged the challenges faced during the regional bank crisis, indicating a broader industry trend where scale is becoming increasingly important [7][8]