Firstar Corp. to purchase U.S. Bancorp for 2.24 times revenue, The

Weekly Corporate Growth Report, Oct 16, 2000

The Deal: The Firstar Corp. has agreed to purchase U.S. Bancorp in a $18.9 billion stock swap. The new company will be the eighth largest bank holding company in the United States. The new entity will retain the U.S. Bancorp name due to the bank's greater name recognition. After the news of the acquisition was announced, shares of Firstar slipped $2.25 to $20, while U.S. Bancorp shares gained $1.81 to close $25.

Discussion: U.S. Bancorp serves 16 western and midwestem states through nearly 1,000 locations. The company operates through four divisions: Wholesale Banking, which provides corporate trust and lending services to corporate and public clients; Consumer Banking, which targets individuals and small to midsized businesses; Payment Systems, which offers credit cards, lines of credit and merchant processing; and Wealth Management and Capital Markets, which provides asset management, insurance and investment products.

The Firstar Corp. operates more than 1,200 branches in 11 midwestern states, as well as locations in Florida and Arizona. The bank provides financial services to consumers and commercial clients of all sizes. Firstar offers consumer and business deposit and lending services, as well as retail brokerage, equipment lease financing, international banking, trust and investment management and title and business insurance.