- Key insight: Fifth Third and Comerica’s shareholders both blessed the companies’ proposed merger, but the two banks are still embroiled in a legal battle with an activist investor.
- What’s at stake: If the deal crosses the finish line, it will be one of the largest bank mergers of the last decade.
- Forward look: The banks still need approval from the Federal Reserve Board and the Texas Department of Banking to close their $10.9 billion deal.
Fifth Third Bancorp and Comerica each won near-unanimous shareholder approval for their proposed $10.9 billion merger on Tuesday, despite opposition to the deal from a vocal activist investor.
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Some 99.7% of Fifth Third shareholders and 97% of Comerica shareholders voted in favor of the deal, the banks announced Tuesday afternoon. Fifth Third CEO Tim Spence called the investor support “an important milestone” in a prepared statement.
The companies are still awaiting the green light from the Federal Reserve Board, but Spence said last month that he wasn’t worried about crossing the T’s and closing the acquisition in the first quarter of 2026.
The Office of the Comptroller of the Currency gave the two banks its blessing last month. And the company earned approval from the Texas Department of Banking on Jan. 2, a Fifth Third spokesperson told American Banker on Tuesday.
The shareholders’ approval is in line with recent recommendations from the proxy advisory firms Institutional Shareholder Services and Glass Lewis, both of which said the deal makes sense strategically and financially. The combination of the banks is expected to create a $288 billion-asset institution with operations across the Midwest and Texas, along with a growing footprint in the Southeast.
“We believe that this merger of two long-standing institutions will create new opportunities to drive innovation, foster deeper relationships, and deliver stronger support for the customers and communities we proudly serve,” said Comerica CEO Curt Farmer in a Tuesday statement.
It’s rare for bank deals to get much pushback from shareholders. Capital One Financial’s landmark acquisition of Discover Financial Services, which drew objections from academics and consumer advocacy groups, earned near-unanimous approval from both companies’ shareholders before it closed in May.
But the latest victory for Fifth Third and Comerica doesn’t necessarily mean the acquisition is headed for smooth sailing across the finish line.
HoldCo Asset Management, a hedge fund with a stake in Comerica, is suing the two banks to stop the deal. The activist investor claims the sales process was flawed, and that Comerica didn’t appropriately shop for buyers or negotiate on price with Cincinnati-based Fifth Third.
HoldCo originally put pressure on Comerica to sell itself last summer, but after the Dallas-based bank announced its deal with Fifth Third in October, the activist investor took the banks to court. Now, the plaintiffs are hoping to use information obtained in the discovery process, such as board materials and deposition testimony, to show in a hearing scheduled for next month that Comerica didn’t do its duty to shareholders in its hunt for a buyer.
Despite the legal battle, Spence said last month that he expected to receive regulatory approval “around the new year.” He added that the company had been in “constant dialogue” with its regulators.
“There is nothing that’s come up that has caused me even the slightest concern,” Spence said at the time.
Fifth Third’s stock is up more than 12% since it announced the deal, while Comerica’s has risen more than 30%.
When HoldCo announced last month that it would vote against the deal, it argued there was “significant upside and limited downside” in voting against the transaction.
HoldCo has argued that one of the largest transgressions was the lack of certain details in Comerica’s initial disclosure about how it assessed selling itself and about its negotiations with another potential buyer. Comerica called the potential buyer “Financial Institution A,” but American Banker later reported it to be Regions Financial.
After Comerica was hit with the lawsuit, it released additional information about how it landed on its deal with Fifth Third, including financial details from the other bid and the bargaining process it went through with Fifth Third.
The banks inked their merger agreement in just 17 days, marking the fastest deal to come together in 2025, despite it being the largest in value.
HoldCo claims in legal filings that Comerica rushed into a transaction that could close in the first quarter due to fears that the hedge fund would launch a proxy battle this spring. The hedge fund has said that as of December, it owned roughly $182 million of Comerica stock based on market value, or about 1.6% of the outstanding shares.
ISS and Glass Lewis, in their recommendations that shareholders approve the deal, each gave kudos to HoldCo for its activist campaign — both in urging Comerica to sell, and in influencing the bank to release additional disclosure about the background of the deal.
“We believe those very supplementary materials lay bare the notion that HoldCo played a particularly key role in pushing Comerica to explore a sale at all, with some cause to conclude the company may have continued with the status quo in the absence of the dissident’s involvement,” Glass Lewis wrote in its report.
