Old National to buy Bremer Financial in $1.4 billion Midwest push

By Arasu Kannagi Basil

(Reuters) -Regional lender Old National Bancorp (NASDAQ:ONB ) will buy privately held Bremer Financial in a $1.40 billion cash-and-stock deal, the companies said on Monday, creating a combined bank with over $70 billion in assets.

Bremer shareholders will receive 4.182 shares of Old National and $26.22 in cash, valuing the lender at $116.76 per share.

Dealmaking between regional lenders has surged this year as they look to scale up to better compete against bigger rivals, and is expected to get a further boost from President-elect Donald Trump's lenient stance on capital rules and merger approvals.

The Bremer deal will bolster Old National's footprint in Minnesota, North Dakota and Wisconsin and be the biggest regional bank deal by assets this year, eclipsing SouthState's acquisition of Independent Bank (NASDAQ:INDB ).

"While we were expecting a longer M&A pause at Old National, Bremer was too good to pass up," Stephens analyst Terry McEvoy said.

Founded in 1943, Minnesota-based Bremer has $16.2 billion in assets, while Indiana-based Old National has about $54 billion.

Bremer is majority-owned by the Otto Bremer Trust and will own about 11% of Old National once the deal is closed, which is expected to be in mid-2025.

The trust was founded in 1944 by Otto Bremer, a German immigrant who invested in many upper Midwest banks during the Great Depression.

Citi and Squire Patton Boggs were the advisers to Old National. J.P. Morgan and Wachtell, Lipton, Rosen & Katz advised Bremer.

Keefe, Bruyette & Woods and Sullivan & Cromwell advised Otto Bremer Trust.

The deal will boost the 190-year-old lender's earnings per share by 22% by 2026-end.

Separately, Old National sold 19 million shares in a stock offering at $21 each for $400 million.

Source: Investing.com