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The MOE Solution
Investors appear skeptical of the recently announced merger of equals between Nashville, Tennessee-based Pinnacle Financial Partners, with $56 billion in assets, and $61 billion Synovus Financial Corp., headquartered in Columbus, Georgia.
The transaction was announced in the afternoon on July 24. The next day, Pinnacle’s stock dropped 12%. Synovus shares dropped 17% over three days after Bloomberg reported on July 22 that the bank was in discussions for a potential deal.
Mergers of equals are complicated compared to standard M&A transactions and present significant execution risk. “They involve people and computer systems and different protocols,” says Jeff Davis, a managing director in the financial institutions group at Mercer Capital. That can make it tricky to achieve promised targets. It could be 2027 or even 2028 before investors know if the Pinnacle/Synovus integration has borne fruit, he says.
Joe Fenech, chief investment officer and founder at GenOpp Capital Management, an asset manager focused on financial services, thinks the deal could be a sign of more M&A activity to come. Regulators under the Trump administration are expected to more readily approve deals. Plus, Fenech points to the number of CEOs approaching retirement. One-third of the executives and directors responding to Bank Director’s 2025 Compensation & Talent Survey said their CEO will step down within the next five years; of those, less than half have identified a successor and established a timeline for that transition.
Company leaders expect the Pinnacle/Synovus merger to close in the first quarter of 2026. Pinnacle CEO M. Terry Turner, who is 70 years old, will become chairman of the combined $116 billion bank. Synovus CEO and chairman Kevin Blair, who is 54, will take the reins as CEO. Two years later, Turner will step down from the board, and Blair will add the chairman title.
Blair is “one of the best and brightest leaders in this field,” Turner said after announcing the deal. Turner had hinted at an MOE as a possible succession solution when he was asked about M&A in the bank’s earnings call earlier in July.
Unfortunately, the markets can be skeptical when a deal appears to solve that problem, says Fenech. “You sort of have Pinnacle solving for management succession but also maintaining control of the combined company through ownership and board representation,” he explains. “If that was the objective that Pinnacle set out for with this transaction … That’s why the reaction to the deal has been so muted.”
• Emily McCormick, vice president of editorial & research for Bank Director
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