Old National and First Midwest agree $6.5bn merger

August 2021 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

August 2021 Issue

In a deal that creates a premier Midwestern bank with $45bn in combined assets, Old National Bancorp and First Midwest Bancorp are to merge in an all-stock transaction valued at $6.5bn.

Under the terms of the definitive agreement, First Midwest stockholders will receive 1.1336 shares of Old National common stock for each share of First Midwest common stock they own. Following completion of the transaction, former First Midwest stockholders are expected to collectively represent approximately 44 percent of the combined company.

With nearly 270 combined years of service and a shared commitment to Midwestern values, Old National and First Midwest are two organisations driven by a customer-centric approach to banking, an unwavering commitment to community and a strong focus on corporate social responsibility, making the combined entity the premier choice for employees, clients and shareholders.

Furthermore, the combined organisation creates the scale and profitability to accelerate digital and technology capabilities to drive future investments in consumer, wealth management and commercial banking services.

The transaction has been unanimously approved by the boards of directors of both companies.

The new organisation will operate under the Old National Bancorp and Old National Bank names, with dual headquarters in Evansville, Indiana and Chicago, Illinois. Michael Scudder, chairman and chief executive of First Midwest, will serve as the executive chairman and Jim Ryan, chairman and chief executive of Old National, will maintain his role as chief executive.

The board of directors of the combined company will have 16 directors, consisting of eight directors from Old National and eight directors from First Midwest. The complete executive leadership team is expected to be announced prior to the close of the transaction.

“First Midwest and Old National are two relationship-focused financial institutions that have rich histories, extremely compatible cultures and a shared commitment to helping clients achieve financial success,” said Mr Scudder. “As a combined organisation, we will be in an even stronger position to invest, grow and innovate in talent, capabilities and services that will enhance an already superior client experience and further set us apart as a market leader.”

The holding company of Old National Bank, Old National Bancorp is the largest bank holding company and ranks among the top 100 banking companies in the US, with $23.7bn in assets. Old National’s merger partner, First Midwest, is a relationship-focused financial institution and one of the largest independent publicly traded bank holding companies, with approximately $21bn of assets and an additional $14bn of assets under management.

“First Midwest’s leadership team and colleagues not only mirror the Old National mission, values and culture, they also offer exceptional consumer and commercial banking services,” said Mr Ryan. “We are confident that the powerful synergies, additional market coverage and financial strength this partnership creates will drive long-term shareholder value.”

Serving as exclusive financial adviser to Old National is Keefe, Bruyette & Woods, with Squire Patton Boggs (US) LLP as legal adviser. J.P. Morgan Securities LLC is exclusive financial adviser and Sullivan & Cromwell LLP is legal adviser to First Midwest.

The transaction is expected to close in late 2021 or early 2022 subject to customary closing conditions, including regulatory and shareholder approvals.

Mr Ryan concluded: “We are excited about combining the outstanding legacies of two strong, client and community-focused organisations.”

Fraser Tennant