ABN Amro North America said Tuesday that it had agreed to buy Comerica Inc.'s Illinois banking unit for $190 million in cash, or 1.15 times book value.
The acquisition would be the fifth since 1990 for the U.S. subsidiary of ABN Amro, the Dutch financial services conglomerate that owns LaSalle Banks in the Chicago area.
The Chicago market has been consolidating rapidly, and Comerica Bank Illinois would add $1.4 billion of assets to the $16 billion of ABN Amro's LaSalle National Corp.
ABN Amro also employs 6,000 people in the Chicago area, and will get 670 more from Comerica.
Detroit-based Comerica Inc. decided to "redeploy" its Illinois investment after failing to find "viable acquisitions," said Eugene A. Miller, chairman of the $35 billion-asset holding company.
Comerica would also use some of the sale's proceeds to fund a stock buyback. (See back page.)
"It makes sense for us and it makes sense for Comerica," said Harrison Tempest, chairman and chief executive of ABN Amro North America. "It's one of those deals that's going to happen more and more, where people see what their strengths are and consolidate into those strengths."
As in other recent in-market deals, a large bank is taking over a smaller institution owned by an out-of-state parent that is unwilling or unable to invest in increasing its market share.
LaSalle National vice chairman Scott Heitmann attributed the relatively low premium over book value to a high capital-to-assets ratio at Comerica- Illinois. The deal is expected to close in the third quarter.
ABN Amro of Amsterdam has $343 billion of total assets and $50 billion in North America, where the company earned 19% of its $2.3 billion in worldwide profits last year. It operates in the U.S. through wholesale bank branches and locally licensed retail banking units, most of them in Chicago.
The Dutch bank made its first major move into the U.S. retail and middle market in 1979 by acquiring LaSalle National Bank. It purchased Exchange Bancorp in 1990, Talman Home Federal Savings in 1992, and Cragin Federal Bank for Savings in 1993.
Last year, ABN Amro agreed to acquire ChiCorp Inc. and its investment banking subsidiary, Chicago Corp., in an effort to build up U.S. capital markets operations.
ABN Amro has made no secret of its aim to close the market gap between it and $122 billion-asset First Chicago NBD Corp. Comerica Illinois would add about $1 billion in retail and business deposits, bringing ABN-Amro operations to more than $14 billion in the Chicago region and a 13% retail deposit share, Mr. Heitmann said.
According to Sheshunoff Information Services, First Chicago NBD had about 22% of total deposits of the $63.8 billion in the Chicago market as of June 30. ABN Amro was second with 17%.
Mr. Tempest conceded that ABN Amro is still well behind, but added "we're going to be a very strong No. 2." He said additional acquisitions are likely.
"We're seeing that a lot of regionals that want to survive this consolidation want to stay in states where they have a dominant market presence and get out of states where their franchise is too small to utilize," said Anthony Howard, an analyst at First of Michigan.