The value of the Berkshire and Brookline merger deal exceeds US$1bn
Berkshire and Brookline are preparing to merge. The deal is worth an estimated US$1.1 billion. The creditors took this step to mitigate the effects of the banking crisis. It broke out in the United States in 2023 and had a negative impact on the global financial sector, especially on regional credit organisations.
The combined company will list its shares on the New York Stock Exchange. The transaction is likely to be completed in the second half of 2025.
Conditions to the merger
In 2024, US management companies focused on increasing the number of deals. This approach helped them expand their footprint and strengthen their market position. At the same time, lenders have improved their competitiveness and reduced the crisis’ impact on internal processes.
However, the fallout from the collapse is still putting pressure on the sector. Banks with assets between US$10 billion and US$100 billion have not recovered. They suffered heavy losses due to higher interest rates, which led to a sharp decline in lending. In addition, the deposit market became more competitive, and banks had to fight for every customer. The growing number of problem loans for the purchase of commercial property exacerbated the situation.
Large regional lenders, including Berkshire and Brookline, were also at risk. Each company has about US$12 billion in assets. The merger would create a single bank with US$24 billion under management.
Combining the two lenders is a win-win situation for both parties. Berkshire focuses on financing small towns and rural markets. Brookline, on the other hand, focuses on large, fast-growing communities.
Deal details
The parties have not yet announced the name of the new company. Details of the deal are scarce, but some information has been leaked to the public:
1. Berkshire Hills is valued at just over US$30 per share.
2. Under the terms of the merger, Brookline’s shares are valued at US$12.7 per share.
3. Berkshire has signed an investor agreement to help raise funds for the merger.
4. Berkshire has issued approximately US$100 million of common stock.
5. The company will use the proceeds from the sale of the shares to strengthen its balance sheet.
The combined company’s board of directors will include eight representatives from each bank. The new company will be divided into six separate regional divisions. Three local managers from each company heading each division. This will create the conditions for business development in the regions and strengthen the company’s competitiveness.
