Insights Report: Closing the Deal
On average, bank M&A deals are taking longer to close these days. With time a critical factor in M&A, understanding the more common obstacles can help would-be merger partners close deals faster.
Brought to you by Howard & Howard Attorneys PLLC
Few things can kill the momentum of a deal like a prolonged time to closing, but by better understanding some of the common reasons for a delayed closing, would-be dealmakers can iron out potential wrinkles and move
forward in a timely fashion.
“If you don’t close the deal and move forward, you’re in this weird gray area,” says Dennis Merkley, an attorney and counselor with Howard & Howard. “The banks are competing against each other. They’re competing for the same loans, but they’re in negotiations to try to become one. To get it done quickly is more beneficial.”
Deals are taking longer to cross the finish line. According to data from the investment bank Janney Montgomery Scott, deals took an average 207 days to close in the first half of 2024, up from 186 days in 2023, 189 in 2022 and 150 days in 2021. A decade ago, bank deals averaged 136 days to closing.
Ideally, a bank merger would close about six months after it’s announced, Merkley says. But when a deal takes longer to close — a year or more isn’t unheard of — investors and other stakeholders may start to question whether regulators uncovered something serious. And they may even lose faith in the combined entity.
With a little planning and communication, prospective merger partners can mitigate some common hurdles to a timely closing.
To download the report, sponsored by Howard & Howard, click here.