NEW YORK (AP) — Webster Financial Corp. is buying Sterling Bancorp in an all-stock deal that values Sterling at more than $5 billion, the northeastern U.S. banks said Monday. The total market value of the deal is about $10.3 billion.
Sterling will merge into Webster with the combined company keeping the Webster name, while establishing a new corporate headquarters in Stamford, Connecticut. Webster is based in Waterbury, Connecticut while Sterling is headquartered in Pearl River, New York. The combined entity will have $63 billion in assets, $52 billion in deposits, and $42 billion in loans, the companies said.
Sterling’s shareholders will get 0.463 of a Webster share for each share of Sterling stock they own. Based on Friday’s closing prices, Webster is paying about $26.56 per share, a premium of about 11%. Upon closing of the deal, expected in the fourth quarter, Webster shareholders will own 50.4% of the combined company and Sterling shareholders will have about 49.6%, fully diluted.
The board and executive management team will come from both companies. Sterling’s president and CEO Jack Kopnisky, will serve as executive chairman of the combined company for 24 months after closing. John Ciulla, chairman, president & CEO of Webster, will serve as president and CEO of the combined company for 24 months after closing, when he will become chairman, president and CEO.
Shares in Sterling jumped more than 4% in afternoon trading. Webster shares slipped about 5%.