LONDON — Lloyds TSB Group PLC said Thursday it has agreed to acquire U.K. mortgage lender HBOS PLC in a landmark deal that would change the face of U.K. banking.

Under the deal, HBOS shareholders will receive 0.83 Lloyds TSB shares for each share they own. The offer values HBOS at GBP12.2 billion ($22.2 billion), based on Lloyds' closing share price on Sept. 17 of 279.75 pence, the companies said. HBOS shareholders will own 44% of the combined group, which will continue to be managed by Lloyds TSB Chairman Victor Blank and Chief Executive Eric Daniels will remain keep their posts in the enlarged group.

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