Bank M&A, which hit a five-year low in 2023, may finally be poised for a comeback.
Atlantic Union Bancshares Corporation (NYSE: AUB) has received approval from its primary federal regulator, the Federal Reserve, for its acquisition of Sandy Spring Bancorp, Inc. (Nasdaq: SASR). The approval came less than three months after the October 21, 2024 announcement of the $1.6 billion transaction, creating a nearly $40 billion asset bank and one of the largest banks in the Mid-Atlantic market. The expedited process for this significant transaction may comfort other financial institutions considering mergers or acquisitions, indicating that the regulatory approval process can be navigated more quickly than expected with proper preparation and swift application filing.
The rapid approval process is also noteworthy for several reasons:
Expedited timeline: The original expectation was for the deal to close "by the end of the third quarter in 2025." However, with Federal Reserve approval already secured and shareholder meetings scheduled for February 5, 2025, the transaction could close as early as the first quarter of 2025. (1, 2)
Regulatory efficiency: The quick turnaround demonstrates that well-prepared acquirers and sellers can navigate the regulatory process efficiently.
Market implications: This swift approval should encourage other potential acquirers and sellers in the banking sector, suggesting that regulatory hurdles may not be as time-consuming as previously thought.
(1) Note that the merger still requires additional approvals from the Virginia Bureau of Financial Institutions and Maryland Office of Financial Regulation, as well as from shareholders of both Atlantic Union and Sandy Spring.
(2) Since 2020, transactions ranging in value from approximately $500 million to $5 billion representing targets with $5 and $25B in assets, the average number of days for federal reserve approval was 201 days versus 84 days for Atlantic Union and Sandy Spring.
If you have questions or want to chat about the odds of an M&A recovery in 2025, reach out: Kevin@klarosgroup.com.
Photo by Guillaume Meurice
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