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Mercantile acquiring Midwest rival for $1.07 billion

December 23, 1996

ST. LOUIS (AP) _ Mercantile Bancorporation Inc., bulking up to ward off competition from the likes of NationsBank, said Monday it would acquire Midwest rival Roosevelt Financial Group Inc. for $1.07 billion.

Roosevelt stock jumped 13 percent on the news.

The cash-and-stock deal comes nearly two months after Mercantile announced it would acquire Mark Twain Bancshares Inc. in an $855 million stock swap. All three banks are based in St. Louis.

The three-way combination moves Mercantile ahead of Boatmen’s Bancshares as Missouri’s biggest bank, with more than 23 percent of the state’s deposits. Boatmen’s was recently acquired by NationsBank.

Mercantile has $18.2 billion in assets and banks in Missouri, Iowa, Kansas, Illinois and Arkansas. The deal would make it the ninth-largest bank in the Midwest and 28th largest in the United States, according to SNL Securities, a financial information service.

Roosevelt, a thrift with assets of $9 billion, has 81 locations in Missouri, Kansas and Illinois and a strong mortgage business. Mark Twain, with banks primarily in Missouri, has $3.1 billion in assets.

``We’d like to think we’re creating a banking all-star team,″ said Stanley J. Bradshaw, president and chief executive of Roosevelt.

Mercantile group president John Beirise said an estimated 50 branches in Missouri would be closed through branch consolidation. He declined to estimate expected job losses.

Analyst Michael Ancell of the Edward Jones investment firm said buyouts would likely continue as competition grows.

``The smaller banks are going to have to find a big brother or really get lean and mean on their own to be competitive because Mercantile and NationsBank both are going to go after business customers with a vengeance,″ he said.

``It’s going to be tough for the small or mid-size banks to compete.″

Mercantile will pay up to 13 million shares of its common stock and the rest in cash at $22 per share for each of Roosevelt’s shares. Roosevelt shares jumped $2.39 to close at $20.52 a share on the Nasdaq Stock Market on Monday. Mercantile shares fell $1 at $49.75 on the New York Stock Exchange.

In addition to the acquisition, which is expected to be completed by mid-1997, Mercantile plans to repurchase up to 7 million of its shares on the open market.

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