FirstMerit announces USD912m deal to buy Citizens Republic.

MANews-(C)2009-2012

13 September 2012 a[euro]" US financial services company FirstMerit Corp (NASDAQ:FMER) has agreed to take over its peer Citizens Republic Bancorp Inc (NASDAQ:CRBC) in a stock-for-stock deal worth about USD912m (EUR707.2m), or USD22.50 apiece, the pair said today.

As part of the agreement, Citizensa[euro](tm) stockholders will get a fixed 1.37 shares of FirstMerit common stock for each of their own common units. The transaction value is based on the buyer's average 10-day closing stock price to 12 September 2012.

FirstMerit will repay Citizensa[euro](tm) USD345m worth of TARP preferred stock, including USD45m of estimated deferred dividends, which is held by the US Treasury. The buyer projects it will realise huge net cost savings of some USD59m on a pre-tax basis and that the transaction will be 7.5% accretive to earnings in 2014.

Through the combination, the parties will form a Midwest banking franchise with USD24bn in total assets, USD15bn in loans, USD19bn in deposits as well as 415 branches, 452 automated teller machines (ATMs) and over 5,000 employees. FirstMerita[euro](tm)s current chairman, president and CEO Paul Greig will continue to lead the enlarged business.

The transaction will allow FirstMerit to set foot into Michigan and Wisconsin as well as to beef up its presence in northwestern Ohio. It has already been approved by the boards of both companies and is now awaiting regulatory and stockholder green light. Completion is scheduled for the second quarter of 2013.

RBC Capital Markets LLC and Jones Day consulted the buyer, while JP Morgan Securities LLC and Dykema Gossett advised Citizens.Country: USASector: Banking/Financial ServicesTarget: Citizens Republic Bancorp IncBuyer: FirstMerit CorporationDeal size in USD: 912mType: Corporate acquisitionFinancing: All-stockStatus: AgreedBuyer advisor: Jones Day, RBC Capital Markets LLC