In the first consolidation to take advantage of the Treasury Department's capital-injection plan, PNC Financial Services Group on Friday announced a roughly $5 billion deal to buy National City Corp.
PNC said it would sell $7.7 billion of preferred stock and related warrants to Treasury under its Capital Purchase Program.
“The acquisition of National City will increase our core deposit base to $180 billion, making PNC the fifth largest U.S. bank by deposits," said James E. Rohr, chairman and chief executive officer of PNC. "We are also gratified that we have been selected to participate in Treasury's Capital Purchase Program, which has helped to put this transaction on a very solid footing."
Peter E. Raskind, chairman, president and chief executive officer of National City, tried to keep the Cleveland-based company independent but in a statement Friday touted the combined company's “scale and scope.”
“This transaction is about two companies that fit well together in terms of geography, products and services," Mr. Raskind said.
Mr. Raskind is to be a PNC vice chairman; one National City director is expected to join the combined company's board.