DEFM14A: Atlantic Union to Acquire Sandy Spring in Major Mid-Atlantic Bank Merger

Atlantic Union Bankshares Corporation will acquire Sandy Spring Bancorp, Inc., creating the largest regional bank headquartered in the lower Mid-Atlantic.

Summary

• Atlantic Union Bankshares Corporation (Atlantic Union) and Sandy Spring Bancorp, Inc. (Sandy Spring) have agreed to a merger where Sandy Spring will merge into Atlantic Union.
• Holders of Sandy Spring common stock will receive 0.900 shares of Atlantic Union common stock for each share they own.
• Based on Atlantic Union's closing price on October 18, 2024, this exchange ratio was valued at approximately $34.929 per share of Sandy Spring, and based on the closing price on December 12, 2024, it was valued at approximately $37.179 per share.
• Atlantic Union expects to issue approximately 42.75 million shares of its common stock in the merger.
• Following the merger, former Sandy Spring stockholders will own about 29% of the combined company, and existing Atlantic Union stockholders will own about 71%.
• Special meetings for both Atlantic Union and Sandy Spring shareholders to vote on the merger are scheduled for February 5, 2025.
• The merger is expected to qualify as a tax-free reorganization for U.S. federal income tax purposes.

Sentiment

Score: 7

Explanation: The document is generally positive, highlighting the strategic benefits of the merger, but also acknowledges potential risks and challenges. The tone is professional and forward-looking.

Positives

• The merger will create a premier banking institution with increased scale and an expanded geographic footprint.
• The combined company will have an enhanced platform for future growth.
• The merger will leverage the strengths of both organizations.
• The surviving corporation will benefit from the talented management teams of both Atlantic Union and Sandy Spring.
• The merger is expected to qualify as a tax-free reorganization for U.S. federal income tax purposes.

Negatives

• The value of Sandy Spring common stock at the closing date of the merger could be greater than, less than or the same as the value of Atlantic Union common stock on the date of the joint proxy statement/prospectus.
• If you do not vote, it will have the same effect as voting AGAINST the Atlantic Union merger proposal and the Sandy Spring merger proposal, as applicable.

Risks

• The value of the merger consideration will fluctuate based on the market value of Atlantic Union common stock.
• The integration of the two companies may be more difficult, costly, or time-consuming than expected.
• The combined company may not realize the anticipated benefits of the merger.
• The merger is subject to regulatory approvals, which may be delayed or not obtained.
• There is a risk of losing key employees during the integration process.
• The merger agreement may be terminated under certain circumstances, and a termination fee of $56 million may be payable.
• Holders of Sandy Spring common stock will have a reduced ownership and voting interest in the surviving corporation.
• Demand letters relating to the registration statement on Form S-4 filed by Atlantic Union have been sent by certain purported stockholders of Sandy Spring, and litigation relating to the merger may be filed against Sandy Spring and members of the Sandy Spring board of directors and/or Atlantic Union and members of the Atlantic Union board of directors in the future.

Future Outlook

The merger is expected to close by the end of the third quarter of 2025, subject to shareholder and regulatory approvals.

Management Comments

• We believe the merger will position the surviving corporation as a premier banking institution, with increased scale, an expanded geographic footprint and an enhanced platform for future growth.
• We believe that the surviving corporation will benefit from the talented management teams, similar core values and strong commitments to serving their customers and communities of both Atlantic Union and Sandy Spring.

Industry Context

This merger reflects a trend of consolidation in the banking industry, particularly among regional banks seeking to increase scale and market presence.

Comparison to Industry Standards

• The document does not provide specific details on comparable companies or projects.
• The document does not provide specific details on global benchmarks.

Management Changes

Legal Proceedings

• Beginning on December 4, 2024, certain purported stockholders of Sandy Spring sent demand letters alleging deficiencies and/or omissions in the registration statement on Form S-4 filed by Atlantic Union on November 21, 2024.

Stakeholder Impact

• Shareholders of Sandy Spring will receive shares of Atlantic Union common stock.
• Employees of both companies may experience changes in their roles and benefits.
• Customers of both banks will be served by the combined entity.
• The merger is expected to create a stronger, more competitive bank.

Next Steps

• Shareholders of both Atlantic Union and Sandy Spring will vote on the merger at special meetings on February 5, 2025.
• The companies will seek necessary regulatory approvals.
• The merger is expected to close by the end of the third quarter of 2025.

Key Dates

Keywords

merger, acquisition, bank, Atlantic Union, Sandy Spring, shareholders, stockholders, exchange ratio, regional bank, Mid-Atlantic