Traverse City Record-Eagle

Business

September 14, 2012

Bank sold in $912M deal

FirstMerit to acquire Citizens Republic

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AKRON, Ohio (AP) — FirstMerit is buying Citizens Republic Bancorp Inc. in a stock-for-stock deal valued at about $912 million. FirstMerit said the acquisition will give it access to Michigan and Wisconsin and bolster its presence in Northeast Ohio.

Citizens stockholders will receive 1.37 shares of FirstMerit Corp. stock for each share they own. This would put the value of a Citizens share at $22.50, based on FirstMerit's average 10-day closing price ended Wednesday. This is a 13 percent premium to the Flint, Mich., company's Wednesday closing price of $19.87.

Shares of FirstMerit declined $1.40, or 8.2 percent, to $15.76 in premarket trading Thursday, while Citizens' stock added 82 cents, or 4.1 percent, to $20.69.

FirstMerit said it will name two Citizens' directors to its board. The Akron, Ohio, company anticipates it will save $59 million pre-tax, on Citizens' expenses after the combination. Citizens has about 1,975 employees, according to FactSet. The companies did not say if staff will be cut.

The purchase should boost its earnings by 7.5 percent in 2014.

The combined company will have about $15 billion in loans, $19 billion in deposits and $24 billion in total assets. It will have 415 branches and more than 5,000 workers in Pennsylvania, Ohio, Michigan, Illinois, and Wisconsin. Citizens branches will be renamed FirstMerit.

FirstMerit President, Chairman and CEO Paul Gregi will continue in those roles for the combined company.

The transaction, which was unanimously approved by both companies' boards, is expected to close in the second quarter of next year. The deal still needs the approval of both companies' shareholders and regulators.

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