First Interstate to merge with Great Western Bancorp in deal worth $2bn

First Interstate BancSystem (FIBK), the parent company of First Interstate Bank, has agreed to merge with Great Western Bancorp (GWB), the parent company of Great Western Bank, in an all?stock transaction valued at around $2bn.

Under the terms of the agreement, GWB shareholders are eligible to receive 0.8425 shares of FIBK Class A common stock for each GWB share held.

The transaction value implies a total of around $2bn, based on the closing price of GWB shares as of 15 September 2021.

The deal was unanimously approved by the Boards of Directors of both parties. It is expected to close in the first quarter of 2022, subject to receipt of regulatory and shareholder approvals.

FIBK president and CEO Kevin Riley said: “The strategic and cultural alignment between our organizations is what makes this transaction so exciting, as we both pride ourselves on being community banks with a strong focus on relationship building, customer service, and community outreach.

“We are eager to expand our community banking model into eight new states and look forward to building relationships with the employees and clients who call these beautiful regions home.”

Upon closing, GWB will merge into FIBK, with the combined holding company and bank planned to operate under the First Interstate name and brand.

GWB shareholders are expected to collectively own a 43% stake in the combined company.

The combined company will have more than 300 branches across 14 states in the US, with assets valuing more than $32bn.

As part of the transaction, five GWB directors will be transitioned to the FIBK Board of Directors, and GWB branches will be converted to FIBK branches.

The combined company is said to consolidate the strengths of both firms to create a diversified, community-focused premier bank in the West.

GWB president and CEO Mark Borrecco said: “We’re excited to join forces, and confident that both companies’ stakeholders will benefit from this partnership.

“We’ll be able to offer customers access to additional branch locations and new products and services, provide new growth and professional development opportunities to our employees, deliver additional returns to our shareholders, and have an even greater impact on our communities.”

In April 2019, FIBK has completed the acquisition of Community 1st Bank (CMYF) and was merged into First Interstate Bank.