US banking agencies and the US Department of Justice (DOJ) review the competitive impact of bank and bank holding company mergers under the federal banking and antitrust laws to prevent mergers that would tend to substantially lessen competition.

The US Department of Justice recently announced that Huntington Bancshares Incorporated (Huntington) and TCF Financial Corporation have agreed to sell 13 branches in Michigan, with approximately US$872.3 million in deposits, to resolve antitrust concerns arising from Huntington’s planned acquisition of TCF Bank. The divested assets include all of the deposits and loans associated with the divested branches, as well as the physical assets.

Huntington is the holding company of The Huntington National Bank, Columbus, Ohio, with approximately US$120 billion in assets. Huntington has 839 full-service branches across seven Midwestern states. Huntington provides a wide range of banking and other financial services to consumers, businesses and wealth management customers.

TCF is the holding company of TCF National Bank, Detroit, Michigan, and has approximately US$48 billion in assets. TCF has 475 branches primarily located in Michigan, Illinois and Minnesota. TCF also provides a broad array of consumer and business banking services, along with other services like wealth management and specialty leasing services, to its customers.

Under the agreement with the Justice Department, the parties will divest branches in Michigan. The companies also have agreed to suspend existing, and not to enter into new, non-compete agreements with branch managers and loan officers located in the divestiture counties for a period of 180 days following the consummation of their merger. Further, the companies have agreed that any traditional branches located in any overlap market in Michigan and Ohio that are closed within three years of the merger’s closing will be sold or leased to an insured depository institution that offers deposit and credit services to small businesses. As a result of the acquisition, Huntington will become the 25th largest insured depository organization based on assets.

The proposed merger is subject to the final approval of the Board of Governors of the Federal Reserve System (Federal Reserve Board) and the Office of the Comptroller of the Currency, the chartering authority for Huntington National Bank, each of which approved the transaction on May 25, 2021. Although certain transactions related to financial institutions are exempt from the standard requirements of the Hart-Scott-Rodino Act, parties to such transactions must still provide copies of the Federal Reserve Board application to the Department of Justice Antitrust Division. The DOJ’s role when reviewing a proposed bank merger necessarily focuses on the merger’s competitive effects. Here, the DOJ has advised the Federal Reserve Board that it will not challenge the merger provided that the parties divest branches in certain areas of overlap and agree that any traditional branches in Michigan and in the five overlapping counties in Ohio that are closed within three years following the merger, will be marketed to an institution with a demonstrated record of providing services and loans to the local community. The parties’ commitments to the DOJ are included as a condition to the Federal Reserve Board Order allowing the transaction.

Norton Rose Fulbright can help parties planning a merger transaction by consulting with the relevant banking agency or the DOJ before submitting an application. Where a proposed merger causes a significant anticompetitive problem, it is often possible to resolve the problem by agreeing to make an appropriate divestiture. In such cases, it may be useful to discuss the matter with the DOJ and the relevant regulatory agency. The DOJ seeks divestitures that will resolve the loss of competition in the market. A divestiture will resolve the problem if it ensures the presence of a strong and vigorous competitor that replaces the competition lost because of the merger.


Senior Counsel

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