ABN Amro to Acquire Midwest Bank

ABN Amro Holding agreed on Friday to buy Michigan-based Standard Federal Bancorp for about $1.9 billion in cash, as the Dutch bank pursues an expansion strategy in the Midwest.

The acquisition of the ninth-largest U.S. thrift would give ABN Amro one of the largest bank franchises in the Midwest, with 310 branches from Chicago to northwest Ohio. It would also become the eight-largest originator of mortgage loans in the U.S. by combining the company’s home lending businesses.

“This is a great addition to our business in the Midwest,” ABN Amro Chairman Jan Kalff said. “It fits darn well with our strategy.”

The transaction shows that ABN Amro, already one of the largest banks in the Chicago area, is staking its claim in North America on consumer banking markets in the Midwest. Other European banks have ventured into U.S. consumer banks in the Northeast and many, including Britain’s Barclays, have since pulled out.

ABN Amro said it would pay $59 for each Standard Federal share, about 1.7% over Thursday’s closing price.

Investors reacted to the offer by sending Standard Federal down $1.625 to $56.375 on the New York Stock Exchange. Many speculated the thrift, whose shares surged in the last month on takeover talk, would fetch a much higher price.

Bank executives said Standard Federal, based in Troy, Mich., received offers from several unidentified financial institutions in a competitive bid.

ABN Amro is buying the largest thrift in the Midwest.