Fifth Third Gets Final Fed Approval for Comerica Takeover
The nod from the central bank clears the last major hurdle for a deal that will create the ninth-largest U.S. bank, signaling a clearer path for large-scale financial mergers.
Fifth Third Bancorp (FITB) has secured the final and most critical regulatory approval from the Federal Reserve Board to acquire Comerica (CMA), a decisive step in creating a new regional banking juggernaut. The all-stock deal, now valued at approximately $11.5 billion, is set to close on February 1, 2026.
The approval from the central bank, announced Tuesday, was the last significant obstacle for the merger, which will combine two of the nation's largest regional lenders into the ninth-largest U.S. bank with roughly $290 billion in assets. The news, however, was met with a muted response in the market, suggesting investors had already priced in the favorable outcome. Shares of Fifth Third were trading at $48.13, down 0.8%, while Comerica shares stood at $89.61, a decline of 0.7% in late trading, in a classic "sell the news" reaction.
"We are thrilled to have all material approvals secured so we can begin an exciting new chapter as one combined company," Tim Spence, Chairman, CEO and President of Fifth Third, said in a statement released on Business Wire. "Together, Fifth Third and Comerica will create a stronger, more diversified bank with industry-leading capabilities."
Under the terms of the agreement, Comerica shareholders will receive 1.8663 Fifth Third shares for each share of Comerica they own. The path to final approval was cleared earlier in January when shareholders of both banks overwhelmingly supported the transaction, with 99.7% of Fifth Third's and 97% of Comerica's voting investors in favor, according to regulatory filings.
The strong shareholder backing came despite vocal opposition from activist investor HoldCo Asset Management, which had urged Comerica shareholders to vote against the merger, arguing the bank was undervalued in the proposed terms.
The strategic rationale for the merger centers on scale and geographic expansion. The combined entity significantly broadens Cincinnati-based Fifth Third's presence, extending its reach into 17 of the 20 fastest-growing large markets in the U.S., including bolstering its footprint in the Midwest and making a major push into Texas and California, where Dallas-based Comerica has a strong presence.
"With the material regulatory and shareholder approvals in place, we are eager to proceed with Fifth Third to combine our organizations," said Curt Farmer, Chairman, President and CEO of Comerica. "For 175 years, Comerica's identity has been built on deep customer trust and dedicated service; we are proud to join an organization that shares these enduring principles."
The Federal Reserve's green light is particularly significant for the broader banking sector, which has seen large-scale M&A activity chilled by heightened regulatory scrutiny in recent years. This approval, following the clearance of the Capital One-Discover deal in 2025, suggests that regulators, while rigorous, are open to consolidation that can demonstrate clear benefits and does not pose systemic risk. According to an analysis from Jones Day, a clearer, if still stringent, regulatory framework appears to be emerging for bank deals.
However, the approval comes with higher expectations. The combined bank will cross the $250 billion asset threshold, subjecting it to stricter regulatory oversight as a Category 3 bank. Fifth Third's management will now face the significant task of integrating Comerica's operations and realizing the promised synergies while navigating a more demanding compliance environment.
Analysts hold a generally positive but watchful view. Fifth Third currently holds a consensus analyst rating of "Buy," with an average price target of $54.71, suggesting potential upside from its current levels. The successful integration of Comerica is seen as a key catalyst to achieving that valuation and proving the strategic merit of the blockbuster deal.