First Union Corp. said Tuesday that it agreed to acquire Florida National Banks of Florida Inc. in a cash and stock deal valued at $749 million.
Meanwhile, Chemical Banking Corp. said it would sell its 4.9% stake in Florida National and abandon earlier plans to acquire the Jacksonville, Fla., bank once interstate banking between New York and Florida is permitted.
Under the latest deal, First Union would pay $27.125 per common share of Florida National, with one half in cash and the other in preferred stock. First Union also received a warrant to buy up to 9.2 million shares of Florida National’s unissued common stock at $22.50 a share.
First Union said Florida National would operate as a Florida subsidiary, with $17 billion in assets, making it the second largest bank in that state with 400 branches.
Florida National, with assets of $7.8 billion, has 185 offices and nearly 5,000 employees. Charlotte-based First Union reported assets of $29 billion at the end of 1988 and operates 702 banking offices in North Carolina, South Carolina, Georgia, Florida and Tennessee.
Florida National Chairman John D. Uible will join First Union’s board of directors and become chairman of the executive committee of the Florida subsidiary. Billy J. Walker will continue as chairman and chief executive of First Union National Bank of Florida and Byron Hodnett would continue as president.
First Union Chairman Edward E. Crutchfield Jr. said the bank plans to “gain significant operating efficiencies from the combined company.”
“Because of those anticipated efficiencies, we expect this merger to have less than 2% impact on earnings per share in 1989 and a slightly positive impact on our earnings per share in 1990,” he said.
Chemical and Florida National Banks had agreed to merge in 1984 when interstate banking between New York and Florida became permissible. But Chemical Chairman Walter V. Shipley said, “Reciprocal interstate banking between Florida and New York seems unlikely in the near future.”