Manufacturers Hanover Corp. and Chemical Banking Corp. will file in the next few days a $1.25 billion common stock offering as part of their planned merger, according to sources close to the banks.

The banks announced plans to issue stock in July when they first announced they would merge.

The deal will probably be priced in January, the sources said. But filing now gives regulators time to study the banks' documents.

Although the offering will come in the wake of a sharp decline in the stock market, analysts expect the merger to stay on track.

"The only thing that might conceivably be a problem for the deal would be if the market were to decline so badly they were unable to raise the $1.25 billion they contemplate raising," said Raphael Soifer, an analyst at Brown Brothers Harriman. But he does not think that will be a problem under current market conditions.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.