Fifth Third Bancorp To Buy Old Kent

Monday, November 20th 2000, 12:00 am

By: News On 6

CINCINNATI (AP) â€” Fifth Third Bancorp, continuing an aggressive expansion program, has agreed to buy Old Kent Corp., of Grand Rapids, Mich., for $4.9 billion in stock, the companies announced Monday.

The merged company will have $69.1 billion in assets, $43.8 billion in deposits and more than 980 banking locations, primarily in Ohio, Kentucky, Indiana, Michigan and Illinois.

Under the agreement, Fifth Third will exchange, on a tax-free basis, 0.74 shares of its common stock for each share of Old Kent common stock. The deal values each Old Kent share at $35.56, based on Fifth Third's closing price Friday of $48.06 per share.

The deal represents a 42 percent premium over Old Kent's closing price Friday of $25.

On the news, shares of Old Kent were up $8.56, or 34 percent, to close at $33.56 Monday on the New York Stock Exchange. Shares of Fifth Third fell $1.69, or 3.5 percent, to $46.38 on the Nasdaq Stock Market.

``Merging with Fifth Third gives us the competitive edge we need to continue to serve the financial needs of both individuals and businesses,'' Old Kent chairman, president and CEO David Wagner. ``Their size, stability and overall market presence will enhance the types of products we offer and significantly expand our presence throughout our primary five state operating region.''

Fifth Third Bancorp, based in Cincinnati, has $44 billion in assets and 14 affiliate banks with operations in parts of Ohio, Kentucky, Indiana, Florida, Arizona, Michigan and Illinois.

Old Kent, a financial holding company with assets of $22.5 billion, operates more than 300 banking offices in Michigan, Illinois and Indiana, as well as Old Kent Mortgage Co.

The deal is to close in the second quarter of 2001 after shareholders of both companies and federal and state regulators approve, the companies announced Monday. The merger should contribute to Fifth Third's 2001 earnings per share, management said.

After the merger is complete, Old Kent will become Fifth Third Bank, Michigan, with three main banks in Grand Rapids, Detroit and Traverse City. Wagner will serve as chairman and CEO of Fifth Third Bank, Michigan and will remain in Grand Rapids.

Old Kent also granted Fifth Third an option to buy 19.9 percent of its common shares. A Fifth Third spokeswoman said that was a fallback measure for the Cincinnati bank in case the merger falls through.

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On the Web:

Fifth Third Bancorp: http://www.53.com

www.oldkent.com