By Lisa Kerner
Charlotte, N.C., Dec. 4 - Capital One Financial Corp. agreed to acquire Chevy Chase Bank in a cash and stock transaction valued at about $520 million, it was announced on Thursday.
The agreement calls for Capital One to purchase Chevy Chase for $445 million in cash and 2.56 million in Capital One shares valued at $75 million.
According to Capital One, the combined company will have deposits of more than $110 billion, a managed loan portfolio of more than $159 billion and 983 branches. Selling shareholders of Chevy Chase will retain certain assets currently owned by the bank, including ASB Capital Management, Chevy Chase Trust and Chevy Chase's headquarters building in Bethesda, Md.
Chevy Chase has more than $11 billion in deposits and is a leading lender in the Washington, D.C., and Baltimore areas.
The transaction is slated to close in the first quarter of 2009, a Capital One news release said.
"This transaction will enhance our strong deposit base, providing us with greater scope and scale in key Mid-Atlantic banking markets," Capital One chairman and chief executive officer Richard D. Fairbank said in the release.
Capital One, a McLean, Va., financial holding company, expects the transaction to be accretive to operating earnings per share in 2009. Merger and integration costs could reach $225.
Credit Suisse Securities (USA) LLC and Centerview Partners LLC advised Capital One while Chevy Chase was advised by Citigroup Global Markets Inc.
| Acquirer: | Capital One Financial Corp.
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| Target: | Chevy Chase Bank
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| Announcement date: | Dec. 4
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| Transaction total: | $520 million
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| Price per share: | $445 million in cash and 2.56 million in Capital One shares valued at $75 million
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| Expected closing: | First quarter of 2009
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| Stock price for acquirer: | NYSE: COF: $31.59 on Dec. 3
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