WASHINGTON — The Federal Reserve said Monday its board has approved PNC Financial Services Group Inc.'s plan to acquire all of the voting shares of National City Corp.
Under the application, PNC would acquire National City and its subsidiary bank, National City Bank, both of Cleveland, Ohio.
The acquisition would make PNC the largest bank in Ohio. Additionally, PNC would become the eighth-largest depository institution in the U.S., with total consolidated assets of about $288.5 billion, following required divestitures, the Fed said.
The Justice Department has asked the companies to sell 61 of National City's branch banking offices in western Pennsylvania, with deposits totaling about $4.1 billion as of June 30, to resolve antitrust concerns. About half of National City's lending and related business with middle-market customers in the Pittsburgh area, and virtually all of that business in the Erie area, would also have to be divested.
After the takeover, PNC would control total deposits of $174.8 billion, representing less than 1% of the total amount of deposits of insured depository institutions in the U.S.
The Fed said the acquisition couldn't be consummated before the 15th calendar day or later than three months after the order without an extension from the Fed.
Pittsburgh-based PNC agreed Oct. 24 to buy National City, based in Cleveland, in a stock-and-cash deal worth $5.58 billion, with the help of the Treasury's bank rescue program. PNC plans to sell $7.7 billion in stock and warrants to the U.S. government, in part to help finance the purchase.
Shareholders for both banks are scheduled to vote on the deal Dec. 23.