UPDATE: PNC to Buy National City

The Courier-Journal (and just about every other media outlet) is reporting that PNC Financial Services (of Pittsburgh) is buying National City Bank (of Cleveland):

PNC Financial Services says it is acquiring National City for about $5.58 billion and will receive $7.7 billion in capital from the federal government. The deal includes $7.7 billion from the government’s bailout program.

Pittsburgh-based PNC will pay $5.2 billion for National City through a stock transaction that values National City at about $2.23 per share, a 18.9 percent discount from Thursday’s closing price of $2.75. The remaining $384 million will be a cash payment to certain warrant holders.

National City is Kentucky’s largest bank based on deposits. In Louisville and Southern Indiana, Cleveland-based NCC has 940 employees, and another 400 in other parts of Kentucky.

National City shareholders will receive 0.0392 shares of PNC common stock for each share of National City they own.

PNC says it will also receive a $7.7 billion investment from the government, under its $750 billion bailout plan.

As you no doubt recall, National City announced earlier in the week that it was slashing 4,000 jobs in response to heavy losses this quarter. No word yet on whether this merger will mean additional job cuts, or if any of those cuts will come in Kentucky.

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