Bank of America to buy LaSalle for $21 billion
Published April 23rd, 2007
Bank of America on Monday agreed to buy LaSalle Bank Corp. for $21 billion in a deal that would help the country’s second-biggest bank break into the key Midwest market.
Bank of America (BAC :
51.04, +0.13, +0.3% ) is buying LaSalle, which operates over 400 branches across Illinois, Michigan and Indiana, from ABN Amro (ABN :
49.29, +0.17, +0.3% ) (NL:30110: news, chart, profile) .
The deal came as ABN Amro itself agreed to be bought by the U.K.’s Barclays (UK:BARC: news, chart, profile) (BCS :
60.00, +0.85, +1.4% ) for around $91 billion. But a rival consortium in the hunt for ABN is also keen to get its hands on LaSalle, leaving the door open to a counter-bid. See full story.
According to the terms of the offer, ABN Amro has 14 days to agree a better deal with a rival bidder. Bank of America, meanwhile, has the right to match any higher offer and would receive a break fee of $200 million if ABN Amro pulls out.
In a statement, Bank of America said the net cost will be $16 billion after a return of $5 billion in excess capital. It added the deal is expected to immediately enhance its earnings per share.
After-tax cost savings are expected to be around $800 million, with restructuring costs also seen at about $800 million.
“In LaSalle, we see a compelling opportunity to fill in a key gap in our national franchise,” said Chief Executive Kenneth Lewis.
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