Fifth Third Bancorp. said Monday it agreed to sell 51 percent of its payment processing unit to private equity firm
The unit will be spun off into a joint venture valued at about $2.35 billion, Fifth Third said in a statement.
The Cincinnati-based bank said it would provide $1.25 billion in bank loans to fund the new company, in which it will hold the remaining 49 percent.
Fifth Third said the transaction is expected to increase its Tier 1 capital by about $1.2 billion.
Fifth Third’s shares closed at $2.35 Friday on Nasdaq.