Comerica Inc. said Monday that it will absorb cross-town rival Manufacturers National Corp. in a stock merger valued at about $1.1 billion that would create one of the nation's biggest banks.
The deal is the latest in a wave of consolidations to sweep the banking industry in the past few months. It would create a banking company with about $26.8 billion in assets, putting it among the 30 biggest banks in the nation.
Under terms of the agreement, Manufacturers shareholders will exchange each share of their stock for 0.81 share of Comerica stock.
The banks said Comerica's name will be retained. The merger was approved Sunday by the banks' boards of directors. It is expected to take effect by the second quarter of next year, after shareholders and federal agencies approve it.
The merger, expected to be completed next spring, will eliminate about 1,800 jobs, ranging from tellers to executives. Combined employment is 13,516.
About 500 to 600 people will be laid off and 60 of 348 branches closed in the next two years, most in southeast Michigan where the two overlap frequently.
Both banks have operations in Florida. Manufacturers has a presence in Illinois and Comerica has business operations in Texas and California.
"As the banking industry rapidly consolidates, Detroit and Michigan will benefit because two well-established local institutions are taking control of their own destiny," said Gerald V. MacDonald, 52, chairman and chief executive of Manufacturers.
MacDonald will be chairman and chief executive of the merged banking company. Comerica Chairman Eugene A. Miller, 54, will be the merged bank's president and chief operating officer.
In 1994, Miller will succeed MacDonald as Comerica chairman.
In recent months, several huge banking companies have announced plans to merge as banking executives seek to cut costs through consolidation.
Among them have been the California banking companies BankAmerica Corp. and Security Pacific Corp.; New York-based Chemical Banking Corp. and Manufacturers Hanover Corp., and Charlotte, N.C.-based NCNB Corp.'s deal with C&S;/Sovran Corp. of Norfolk, Va.
The merged Comerica will take a onetime writeoff of $105 million to $115 million for restructuring costs such as severance settlements and buyouts. Banking analyst Steve Puhr of Roney & Co. said he estimates an after-tax hit of about $70 million against earnings of $291 million in 1992.
Both stock issues soared Monday on the New York Stock Exchange. Comerica closed up $5 a share at $47.875. Manufacturers was up $3.625 at $37.375.
The Banks at a Glance The merger of Comerica Inc. and Manufacturers National Corp. is expected to create one of the nation's biggest banking companies.
Comerica Manufacturers Total assets $14.3 billion $12.5 billion Loans $8.9 billion $7.6 billion Total deposits $11.4 billion $9.1 billion Employees 7,218 6,298 Branches 256 157
Source: Company reports