STT State Street Corporation

On Thursday, BB & T Corp.’s (BBT) subsidiary, BBT Insurance Services, announced the acquisition of San Jose, California-based Liberty Benefit Insurance Services. Though the terms and the value of the deal were not disclosed, the agreement is expected to close on October 1.

Founded in 1991, Liberty is a full-service employee benefit broker, which manages rising health care costs, changing regulations and complex benefits administration for large commercial clients.

BBT stated that after the completion of the transaction, Liberty would operate under the name – BBT-Liberty Benefit Insurance Services. At present, BBT Insurance operates with 100 offices in 10 states and is the sixth largest insurance broker in the country.

BBT Insurance started its operations in California with the acquisition of UnionBanc Insurance Services in 2008. The present deal is a part of BBT Insurance’s long-term strategy to expand in California. The completion of the agreement will lead to the addition of 25 employees to BBT Insurance.

Mr. Greer, the president of Liberty, stated that with the completion of the proposed acquisition, its clients would be able to access a superior and broad range of insurance and risk management services.

Apart from BBT, earlier this week, State Street Corporation (STT) also announced the acquisition of Pulse Trading Inc., a Boston based full-service agency brokerage firm. The deal, which is expected to close in the fourth quarter of 2011, would add 40 employees to State Street’s workforce.

Besides substantially increasing BBT’s market share in California, the Liberty acquisition would also improve the company’s top-line over the medium term.

BBT currently retains a Zacks # 3 Rank, which translates into a short-term ‘Hold’ rating. Furthermore, considering the fundamentals, we are maintaining our long-term “Neutral” recommendation on the shares.

 
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