Banc One-First Chicago Deal Gets Fed OK

Banc One Corp.’s proposed $21-billion acquisition of First Chicago NBD Corp. won Federal Reserve Board approval, the last regulatory hurdle for the deal that would create the nation’s fifth-largest bank. The Fed decision came less than a week after the Justice Department cleared the purchase after ordering the sale of branches in Indiana, where the two leading Midwest banks would have overlapping operations. Shareholders for both banks are expected to meet today to approve the merger. Memphis, Tenn.-based Union Planters Corp. has agreed to buy 51 branches with $1.8 billion in deposits from First Chicago for about $294 million. Banc One had to sell branches to meet complex competition guidelines stipulating that no company can control more than 30% of a state’s deposits. The Fed said these sales, combined with the fact that there are numerous competitors in Banc One’s markets, will mean that competition will not be diminished. The Fed also said the merger would not hurt customer services, something that several community groups had argued would happen. The combined bank, to be based in Chicago, will have 2,000 offices and assets of $231.7 billion. Banc One shares rose 56 cents to close at $44.31 on the New York Stock Exchange.