The rapid consolidation of the banking market in Michigan and the Midwest in general is accelerating.
Making good on its pledge to make more acquisitions in the U.S. heartland, ABN Amro Holding NV, the largest Dutch banking company, said late Wednesday that it would acquire an $11.6 billion-asset Michigan National Corp. from its Australian owner for $2.75 billion of cash. ABN Amro has substantial holdings in the United States, including LaSalle Bank in Chicago, European American Bank in New York, and Standard Federal in Troy, Mich. Standard Federal would merge with Michigan National to take the second spot in market share in the state.
The deal was announced just two days after news that Old Kent Financial Corp. of Grand Rapids, Mich., had agreed to be acquired by Fifth Third Bancorp of Cincinnati. Fifth Third, which would have briefly achieved the third slot in the states market share, now would slip back to fourth. Bank One leads the Michigan pack, and Comerica Inc. would drop to third.
This acquisition is key to furthering ABN Amros strategy of building on our already solid banking franchise in the Midwest, said Scott K. Heitmann, chairman, president and chief executive officer of Standard Federal Bank, in a press statement. He pointed to the companies complementary businesses, particularly in middle-market commercial lending, as a key opportunity for growth.
The sale, which requires regulatory approval, is slated to close by the end of the second quarter.
It would leave National Australia Bank Ltd. with no U.S. commercial bank. National Australia entered the U.S. market five years ago by buying Michigan National, which is based in Farmington Hills, for $1.56 billion. Three years later it paid $1.2 billion for HomeSide Inc., a Jacksonville, Fla., mortgage company.
Rumors that Michigan National, which has 3,600 employees and 185 branches, might be sold have circulated for some time and resurfaced as recently as May. The market speculation then was that ABN Amro, which already had a foothold in Michigan through its Standard Federal Bank subsidiary, and Old Kent might be bidders.
National Australia Bank said Wednesday that it would redeploy assets from the sale to its other businesses, including the development of its U.K. operations and a more rapid buildup of its global wealth management business.
In May, ABN Amro announced a reorganization intended to align its products and services into three largely autonomous business units wholesale, retail, and private clients and asset management. The company offers a variety of banking services in the United States, including asset management, but lately its push has been on the retail front in the Midwest and the Northeast.
Just days before the Michigan National deal was unveiled, the Dutch company reiterated its bid to restructure, offering more specifics on its plans in the United States and regrouping its businesses into three global units: consumer and commercial, wholesale, and private clients and asset management.
In building its consumer and commercial client business, ABN Amro has earmarked the Midwest, the East Coast, Brazil, and the Netherlands as areas of focus. And the company, which completed its acquisition of Allegheny Asset Management last month, said recently that it will continue to build its presence as an asset manger here.