Synovus (SNV) stock plummeted 5.68% in after-hours trading on Thursday, following the announcement of a definitive agreement to merge with Pinnacle Financial Partners in an all-stock transaction valued at $8.6 billion. The sudden drop came as investors digested the news of this significant consolidation in the Southeast banking sector.

According to the merger agreement, Pinnacle Financial Partners and Synovus will combine to create what they're calling the "Southeast Growth Champion." The exchange ratio represents a Synovus per share value of $61.18, which is notably higher than the closing price before the announcement. Despite this premium, the after-hours stock movement suggests that some investors may have concerns about the deal or its terms.

The combined company will operate under the Pinnacle Financial Partners and Pinnacle Bank name and brand, potentially raising questions about Synovus's future identity within the merged entity. Pinnacle expects the deal to be approximately 21% accretive to its estimated operating EPS in 2027, highlighting the long-term strategic nature of this merger. As the market continues to evaluate the implications of this major banking consolidation, Synovus shareholders will be closely watching for further details and potential benefits of the merger.