CIT Group (NYSE:CIT) stock is taking off on Friday following news that the company is merging with First Citizens (NASDAQ:FCNCA).
The merger will have the new company operating under the First Citizens name and will create the 19th largest bank in the U.S. when measured by assets. Current FCNCA chairman and CEO Frank Holding, Jr. will lead the new company. CIT Group chairwoman and CEO will join First Citizens as vice chairwoman and will serve on the company’s Board of Directors.
The deal between the two companies will only have stock changing hands and doesn’t require any cash. It will have holders of CIT Group stock receiving .062 shares of First Citizens stock for each share that they own. This will have FCNCA shareholders owning 61% of the company and CIT shareholders owning the remaining 31%.
Once the deal is complete, the new company will continue to trade on the Nasdaq under the FCNCA ticker. It’s Board of Directors will be made up of 14 members. That includes the current 11 members from First Citizens and four Board members from CIT Group.
Holding, Jr. said the following of the deal.
“This is a transformational partnership for First Citizens and CIT designed to create long-term value for all of our constituents including our stockholders, our customers, our associates and our communities.”
The merger is set to close in the first half of 2021. It still needs approval from regulators and shareholders before it can close.
CIT stock was up 28.9% and FCNCA stock was up 13.2% as of Friday morning.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.
