Sign in Subscribe
Banking industry

ABN AMRO to Acquire Michigan National Corporation for US$2.75 Billion

Strategic Insights

— 2 min read

ABN AMRO Bank N.V. is set to become Michigan's second largest national bank after acquiring Michigan National Corporation for US$2.75 billion in cash. The acquisition, which is expected to close by the end of the first half of 2001, pending regulatory approvals, will have a positive effect on earnings per share for ABN AMRO as of the first full year after completion of the transaction. Michigan National Corporation, a US$11.6 billion commercial bank holding company, will be merged into a wholly owned subsidiary of ABN AMRO North America, Inc., creating the second largest bank in Michigan.

Key Takeaways:

  • ABN AMRO will acquire Michigan National Corporation, a US$11.6 billion commercial bank holding company, for US$2.75 billion in cash.
  • The acquisition is expected to close by the end of the first half of 2001, pending regulatory approvals.
  • The transaction will result in a gain to the National of US$1.1 billion (A$2.1 billion) after adjusting for additional capital, earnings, taxes, and expenses.
  • The acquisition will have a positive effect on earnings per share for ABN AMRO as of the first full year after completion of the transaction.
  • Michigan National Bank, with 3,600 employees, 185 branches, and 332 ATMs, will operate under its current name until the banks merge in 2001.
  • The combined banks will offer operating synergies, resulting in cost efficiencies and enhanced productivity.
  • ABN AMRO will redeploy assets from the sale to support its international strategy, including the development of its UK operations and the expansion of its Global Wealth Management platform.
  • The National will be redeploying assets to its other business activities, including further developing its organic opportunities in the UK.
  • Name: Frank Cicutto, Managing Director and CEO of the National mentioned that Michigan National's performance since acquisition in 1995 has exceeded expectations, but the bank needs further scale to capitalize on opportunities to successfully compete in its market.

Statistics:

  • Total assets: Michigan National Corporation, US$11.6 billion (as of September 30, 2000)
  • Acquisition price: US$2.75 billion in cash
  • Gain to the National: US$1.1 billion (A$2.1 billion) after adjusting for additional capital, earnings, taxes, and expenses
  • Number of employees: 3,600 (Michigan National Bank)
  • Number of branches: 185 (Michigan National Bank)
  • Number of ATMs: 332 (Michigan National Bank)
  • Date of acquisition: Expected to close by the end of the first half of 2001, pending regulatory approvals

Sources:

  • ABN AMRO Bank N.V. press release, November 22, 2000
  • Michigan National Corporation press release, November 22, 2000
  • The National Australia Bank Limited press release, November 22, 2000
  • Fortune 500, July 2000
  • Michigan National Corporation web site, www.michigannational.com (referenced date: September 30, 2000)

Read more