National Australia Bank to Buy Michigan National

National Australia Bank said Monday it agreed to buy Michigan National Corp., owner of Michigan National Bank, for $1.55 billion.

The Australian bank said it will pay $110 per share, nearly a 25% premium over Michigan National’s closing price Friday of $88.75 a share in Nasdaq trading.

Michigan National operates 191 branches in southern and central Michigan, including the Detroit area. The bank employs more than 4,000 people.

Michigan National Bank had total assets of $8.7 billion and in 1994 earned an after-tax profit of $171.7 million.

“In the short and medium term Michigan National should make an increasing contribution to group profitability,” NAB Chairman Bill Irvine said in a statement announcing the deal.

Commercial business represents about 80% of the bank’s lending, he said.

NAB said Michigan National Corp. would be merged with a wholly-owned U.S. subsidiary of the bank.

It said the acquisition would increase group assets by about 9%, with about 10% of the group’s assets in the United States. “If approved, the acquisition will provide the group with a valuable business base in an attractive banking market,” Irvine said.

The purchase, which is subject to approval by U.S. state and federal authorities, should be completed within 12 months.

“Michigan National has a robust franchise based on its business lending activities and its deposit base,” Irvine said.