Silicon Valley Bank (SVB) has been acquired by North Carolina-based First Citizens Bank, according to a March 27 Federal Deposit Insurance Corporation (FDIC) press release. The purchase includes all of SVB’s U.S. departments — including the bank’s significant wine division, per the wine department founder and executive vice president (EVP) Rob McMillan.
In a March 27 email, McMillan shared details of the acquisition with VinePair:
“The outcome of the auction process wasn’t easy to predict. There were multiple bidders, and the FDIC indicated they were open to selling off the bank in divisions if it produced a better return. Late Sunday night, we found out that First Citizens Bank had acquired the entire banking business of SVB, including the commercial bank, the private bank, and the wine division. The acquisition did not include the SVB foreign subsidiaries. That’s great news for us as we were able to remove the question of ownership in just over two weeks — even if it felt like two months from the inside. Selling the commercial bank whole allows for the least amount of disruption for clients and employees, so that’s a win.
In combining the two banks, it’s important to note that there is little overlap between First Citizens Bank and Silicon Valley Bank, either in geographies or industry focus. That means this isn’t the type of acquisition that was done with the intent of closing up redundant offices. To the contrary, this expands the First Citizens Bank footprint. And because the industries each bank targets are different, this is an opportunity to bring together complementary strengths of both banks in middle market commercial banking. The old Silicon Valley Bank will now be run under the name Silicon Valley Bank, a division of First Citizens Bank. That will include the Wine Division as well.
It’s still very early in the process, but this looks to be the most ideal outcome for the sale of the old bank. We seem to share common values in client care, and with this we should be able to resume the work we do best.”
The bank failure is estimated to cost the deposit insurance fund some $20 billion, according to the FDIC.
The article Confirmed: Sale of SVB Assets to First Citizens Bank Includes Wine Division appeared first on VinePair.