Old National Bancorp's $1.4 Billion Acquisition of Bremer Financial

Major Acquisition by Old National Bancorp

In a groundbreaking move, Old National Bancorp (NASDAQ: ONB) has announced its decision to acquire Bremer Financial in a monumental cash-and-stock deal valued at $1.4 billion. This strategic acquisition aims to create a robust banking entity with assets exceeding $70 billion, enhancing its competitive edge in the regional banking sector.

Details of the Deal

Shareholders of Bremer Financial will benefit from this transaction, receiving 4.182 shares of Old National along with $26.22 in cash for each share they own. This valuation impressively places Bremer’s share price at approximately $116.76, offering favorable returns for its investors.

Growing Trend Among Regional Lenders

The current financial landscape has witnessed a surge in mergers and acquisitions among regional lenders. As institutions strive for more significant scale to compete with larger banking rivals, such deals are becoming increasingly common. Moreover, favorable conditions anticipated from new regulatory landscapes may encourage even more regional consolidations.

Enhancing Market Reach

This acquisition enhances Old National's presence notably in states like Minnesota, North Dakota, and Wisconsin. With Bremer, which has approximately $16.2 billion in assets and was established in 1943, Old National's footprint in these regions will expand markedly, positioning them as a formidable player in the marketplace.

The Role of Major Stakeholders

The Otto Bremer Trust holds a significant stake in Bremer Financial and will transition to becoming an 11% shareholder in Old National post-acquisition. This connection not only illustrates the intertwined interests of key players within the regional banking sector but also highlights the trust's continued influence following the merger.

Financial Advisers Involved

Citi and Squire Patton Boggs have served as financial advisers for Old National throughout this transaction, while Bremer Financial was advised by J.P. Morgan and Wachtell, Lipton, Rosen & Katz. Additionally, Keefe, Bruyette & Woods, along with Sullivan & Cromwell, represented the interests of the Otto Bremer Trust.

Other Recent Developments

In conjunction with the acquisition announcement, Old National has also successfully completed a stock offering, raising $400 million by selling 19 million shares at $21 each. This capital injection not only bolsters its financial standing but also prepares it for future growth opportunities.

Future Outlook for Old National Bancorp

As Old National Bancorp continues its ambitious journey, the combination with Bremer Financial is expected to unlock greater operational efficiencies and expand its service offerings. By consolidating resources and expertise, the new entity will be well-positioned to cater to a broader customer base, set against an evolving economic backdrop.

Frequently Asked Questions

What is the value of the Old National Bancorp and Bremer Financial deal?

The deal is valued at $1.4 billion, combining cash and stock elements for shareholders.

How will Bremer Financial shareholders be compensated?

Shareholders will receive 4.182 shares of Old National and $26.22 in cash per share, totaling $116.76 in value.

What markets will Old National expand into with this acquisition?

The acquisition will enhance Old National's market presence in Minnesota, North Dakota, and Wisconsin.

Who provided advisory services for this acquisition?

Advisers for Old National included Citi and Squire Patton Boggs, while Bremer Financial was guided by J.P. Morgan and Wachtell, Lipton, Rosen & Katz.

What other financial activity has Old National engaged in recently?

Old National raised $400 million through a stock offering, selling 19 million shares at $21 each, reinforcing its capital structure.

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