First Union Corp. announced an agreement Friday to acquire Keystone Investments Inc., Boston, for about $183 million.

First Union said the purchase of Keystone's $11.6 billion in investment management and mutual fund assets would make it the third-largest bank manager of mutual funds, with $27 billion in assets. The Charlotte, N.C., company currently ranks fifth.

By adding Keystone's 33 retail, 3 institutional, and 9 foreign mutual fund portfolios to its list, the bank will bring its total to 69.

First Union will issue 2.9 million shares of common stock for the purchase. The deal calls for the bank to assume $106 million of Keystone's debt.

The price is lower than the industry standard of 2% of assets under management, which is what most mutual fund companies fetched this year. Investment bankers attributed the discount to Keystone's slow growth and First Union's assumption of the company's debt.

The deal is expected to close late this year or early in 1997, according to a statement from First Union.

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