Recently on this blog we discussed the forecast of bank mergers and acquisitions right here in Baton Rouge. Experts suspect that smaller banks will continue to combine their forces to reduce costs and expand client bases. To see just how powerful a merger or acquisition can be, one need only look at the plan two regional banks have in mind that, if enacted, could make it one of the biggest banks in the country.
According to reports, BB&T and SunTrust Banks are planning on merging. If successful, the business will become the sixth largest bank in the country with nearly half a trillion dollars in assets and more than 10 million customers.
The most likely driving force behind the merger is the fact that the banks will cut operating costs by an estimated $1.6 billion over the next three years. This is significant savings that may spur growth and opportunity.
Of course, there are a wide variety of federal regulations that dictate whether mergers involving financial institutions can be approved. This is in sharp response to the economic crisis that occurred a decade ago. While not all businesses will face these regulations when they attempt to merge with or acquire another business, the fact remains that there usually are challenges to successfully completing this process.
This is why businesses are advised to seek legal counsel before delving into the world of mergers and acquisitions. A skilled business law professional can help develop a plan that protects the best interests of the client, including ways to handle personnel.
In the merger discussed above, for example, the CEOs of each respective bank will serve a term as CEO of the newly formed bank. This is likely something that was negotiated prior to moving forward with the merger plan and highlights the importance of paying attention to detail when handling these matters. Those who think they could benefit from speaking to a legal professional about mergers and acquisitions are encouraged to do so.