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PNC to Pay $6 Billion for Baltimore Bank

October 10, 2006|From the Associated Press

PITTSBURGH — PNC Financial Services Group Inc., one of the nation's largest regional banks, said Monday that it was buying Baltimore-based Mercantile Bankshares Corp. for about $6 billion as part of an expansion plan targeting fast-growing, upscale markets.

The Pittsburgh-based company said the cash-and-stock deal would further its growth along the affluent New Jersey-to-Washington corridor, adding hundreds of new branches in Maryland, the District of Columbia, Virginia and Delaware.

"I think it's fairly self-evident that the combination of Mercantile and PNC will be a mid-Atlantic powerhouse," said James E. Rohr, PNC's chairman and chief executive.

PNC got a foothold in the Washington market last year with its $643-million acquisition of Riggs Bank.

Based on PNC's Friday closing price of $73.60, the deal values shares of Mercantile at $47.24 apiece, a 28.4% premium over its Friday closing price of $36.78.

Shares of Mercantile Bankshares on Monday rose $8.16, or 22.2%, to $44.94. PNC fell $3.20, or 4.35%, to $70.40.

PNC has $94.9 billion in assets and more than 2.5 million consumer and small-business customers in Pennsylvania, New Jersey, Maryland, Virginia, Delaware, Ohio, Kentucky, Indiana and the District of Columbia.

Mercantile has $17 billion in assets and offers services through 240 offices in Maryland, Virginia, the District of Columbia, Delaware and southeastern Pennsylvania.

PNC said the deal for Mercantile should make PNC a top-10 U.S. bank holding company by market capitalization.

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