WASHINGTON (CN) – Seven months after BB&T and SunTrust announced plans to merge, the Justice Department cleared them a path Friday that requires one of the largest divestitures in a bank merger in the last decade.
In a statement released Friday, the agency said the Mid-Atlantic banks must unload about $2.3 billion in deposits to address antitrust concerns.
The divestment plan involves 28 branches across the two bank’s service areas.
“Today’s settlement ensures that banking customers across Virginia, North Carolina, and Georgia will continue to have access to competitively priced banking products, including loans to small businesses, while preserving the investments in innovation and technology this merger is expected to generate,” Assistant Attorney General Makan Delrahim said in a statement.
BB&T and SunTrust announced their merger hopes in February. Though they promised consumers would see little changes with their accounts, interest rates, credit cards or automated bill pay services, branches are expected to close or rebrand following approval of the plan Board of Governors of the Federal Reserve System and Federal Deposit Insurance Corporation.
The new company will be renamed Truist Financial and have its headquarters located in Charlotte, North Carolina. First Horizon Bank, formerly First Tennessee Bank, will purchase the divested branches as part of the plan.
SunTrust Chairman and CEO Bill Rogers said in a statement the company was “pleased to have found a buyer that will retain the jobs of talented teammates and continue to foster the strong client relationships we have established in these branches.”
If the merger is approved, it will create the sixth-largest U.S. bank holding company.
Representative Maxine Waters, a Democrat who chairs the House Financial Services Committee, expressed disdain for the proposed merger this past summer, fearing it would win “rubber stamp” from an agency that she said often fails under President Donald Trump to properly scrutinize these kinds of deals.
“I am concerned that if this merger goes forward, it will create yet another megabank that is too big to manage and that poses a risk to our financial system,” Waters said in July, noting the proposed merger is the largest since the 2008 financial crisis. “If this merger is approved by regulators, the resulting bank would have around $442 billion in assets, making it larger than Washington Mutual was, and more than twice as large as Countrywide was. Of course, the failure of those two institutions played a significant role in the financial crisis.”
Waters did not return requests for comment on Friday’s announcement.