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AmSouth buying First Am
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June 1, 1999: 7:40 a.m. ET
All-stock transaction places value of Southern bank merger at $6.3B
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NEW YORK (CNNfn) - AmSouth Bancorp, Alabama's third-biggest bank, said Tuesday it has agreed to acquire Nashville-based First American Corp. in a $6.3 billion all-stock deal.
Under terms of the agreement, AmSouth said will exchange 1.871 shares of its stock for each of First American's, valuing the Nashville-based bank at $53.09 a share. That's a 30 percent premium based on Friday's closing prices and around 20 times 1999 earnings.
First American (FAM) closed at 40-7/8 Friday while AmSouth (ASO) closed at 28-3/8.
The deal will double the assets of Birmingham-based AmSouth to about $40 billion, boost its market capitalization to around $11 billion market, and allow it to expand into Tennessee and Mississippi. The new bank, to be called AmSouth Bancorporation, will have 680 branches and the largest automatic teller machine network in the Southeast.
"The transaction will push AmSouth's already strong return on equity even higher, ranking it among the top tier of banks in the country," AmSouth Chief Executive C. Dowd Ritter said in a statement.
Ritter will become chairman and CEO of the combined bank, while First American Chairman and CEO Dennis Bottorf is expected to retire within a year.
The banks said they hope to complete the deal by the end of this year. It was unanimously approved by directors of both companies, but requires approval from shareholders and regulators. 
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AmSouth
First American
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