PNC Financial Services Group says it is to buy Mercantile Bankshares Corporation for an estimated USD 6 billion in cash and stock. This is expected to make PNC one of the top ten largest US banks in terms of market capitalisation.
Following the deal shares in PNC reportedly fell by as much as 4.4 per cent on Monday, with investors apparently concerned that the premium paid on shares was too high.
“Mercantile is a storied franchise and a perfect fit for PNC,” says James Rohr the chairman of PNC. “Its location, wealth management business and relationship-based banking model will add to PNC’s strengths and ability to grow profits.”
As part of the deal, the current Mercantile chairman, president and chief executive Edward Kelly will become the new PNC vice chairman, a move expected by the end of 2007’s first quarter.