NBD Bancorp Plans $900-Million Purchase

In a deal that would cement its status as a Midwestern powerhouse, NBD Bancorp Inc. on Wednesday said it plans to acquire INB Financial Corp. in a deal valued at almost $900 million.

Detroit-based NBD, the nation’s 24th-largest banking company, would rise to about the No. 16 position if its pending takeover deals go through. NBD, with assets of $31 billion, also has a merger pending with Summcorp, a $2.5-billion bank group based in Ft. Wayne, Ind.

Indianapolis-based INB has assets of $6.6 billion.

Under the deal announced Wednesday, INB stockholders will get 1.6 shares of NBD common stock for each share of INB they own. A statement released by the two companies said the stock swap would be worth about $876 million.

INB shares jumped $7 to close at $43 in over-the-counter trading. NBD lost 87.5 cents to close at $28.875 on the New York Stock Exchange.

“It’s a good deal for both companies, and the price is not excessive,” said industry analyst Kenneth Puglisi of Keefe, Bruyette & Woods.

“We believe this transaction will greatly benefit our customers, employees and shareholders, as well as the communities served by our banks,” NBD Chairman Charles Fisher said in a statement.

INB said the merger will provide it with “resources to compete in the financial services industry of the future, and we will be able to offer our customers the many benefits of a strengthened Indiana banking franchise.”

“NBD was strong before this deal, and this deal makes it stronger,” said analyst Dennis LaPlante of Fox-Pitt Kelton. “NBD will continue to expand.”

He said the Midwest will continue to be dominated by four banks that have strong capital and few asset quality problems: NBD, Banc One Corp., National City Corp. and Society Corp.

“NBD is already one of the Midwestern leaders. This makes them more so,” Puglisi said.

NBD plans to issue 29.6 million new shares of common stock for the deal. Without the issue, the Federal Reserve would probably nix the deal