The PNC Financial Services Group, Inc. and National City Corporation today announced that they have signed a definitive agreement for PNC to acquire National City for $2.23 per share, or an aggregate fixed amount of approximately $5.2 billion in PNC stock.
PNC plans to issue to the U.S. Treasury $7.7 billion of preferred stock and related warrants under the TARP Capital Purchase Program subject to standard closing requirements.
The transaction is currently anticipated to close by Dec. 31, 2008.
I'm glad to see an acquisition rather than a bank failure. Since it's not a failure, I would assume customers with National City CDs or new customers who are participating in the National City's checking account promotion will still receive the original rates and bonuses. When a bank fails and its deposit accounts are assumed by another bank, the new bank will often decide to close the CD early (without penalties) and to not honor bonuses of the old bank. Examples of this happened when Netbank failed last year and ING Direct acquired Netbank deposit accounts. I haven't seen cases of this after a merger. If you have experience with this, please leave a comment.
I'm afraid it's likely that we'll see much fewer CD deals from National City. However, it might not happen quickly. WaMu didn't end its 5% 12-month CD immediately after JPMorgan Chase took over. So you still may have time to take advantage of National City's current CD deals.