NEW YORK (CNNfn) - As part of its ongoing strategy of consolidation in the midwestern banking market, Union Planters Corp. said Wednesday it has agreed to purchase bank holding group Ambanc Corp. for $221 million in stock.
Under terms of the agreement, Ambanc shareholders will receive .04841 share of Union Planters stock for each share of Ambanc.
Union Planters is a Memphis, Tenn.-based bank holding company with assets of $18 billion and offices throughout the South and Midwest.
"[Ambanc's] focus on community banking is very much like our long term strategy," Union Planters Chairman and CEO Benjamin Rawlins Jr. said in a statement. "This affiliation fits very well geographically with the banking franchises in Illinois and west Kentucky that are part of our pending acquisition."
Union Planters has several other pending acquisitions totaling approximately $11.75 billion, including the $7 billion Magna Group, with 139 offices in Missouri, Illinois and Iowa, and the $1.5 billion Peoples First, which operates 29 locations in western Kentucky and Clarksville, Tenn.
"This community banking strategy presents a 'best of both worlds' organization to our markets in Indiana and Illinois," said Ambanc Chairman, President and CEO Robert G. Watson.
Ambanc controls approximately $750 million in total assets through its two major subsidiaries, AmBank Indiana and AmBank Illinois, with 26 offices throughout southern Illinois and Indiana.
The merger is still contingent on the approval of U.S. regulatory agencies and Ambanc shareholders, but is expected to close in the third quarter of 1998.
Shares of Ambanc (AMBK) were down 5/8 at 29-1/8 while Union Planters (UPC) was down 1-5/16 at 60-7/8 in late morning over-the-counter trading.
After pending transactions are completed, Union Planters will be in the top 30 banks in the United States in terms of asset size.