UNION PLANTERS, MAGNA AGREE TO MERGER

Union Planters Corp. of Memphis, Tenn., has announced the signing of a definitive agreement to acquire Magna Bank Group of St. Louis.

Bill Andrews of Union Planters said an agreement has been approved by the boards of both companies. The merger is subject to approval of shareholders and appropriate regulatory agencies. It isn't expected to be closed before the second or third quarter of the year.

The transaction, approximately $2.3 billion, will be accounted for as a pooling of interests. It provides for a tax-free exchange of 0.9686 shares of Union Planters stock at closing prices of Feb. 20 for each common share of Magna Group.

Union Planters closing price Feb. 20 was $63 7/16. Magna's price was $61.45.

Magna granted Union Planters the option to purchase under certain circumstances up to 19.9 percent of Magna's outstanding common stock.

Magna Group is the third largest bank holding company headquartered in Missouri. It serves more than 60 communities with 139 banks in Missouri, Illinois and Iowa. It reported total assets at year's end of $7 billion.

Sixty percent of Magna's deposits are in the St. Louis metropolitan market. Central and Southern Illinois accounted for 21 percent of Magna business, with the remaining 19 percent of deposit in Iowa.

Union Planters also has banking operations in the St. Louis metropolitan area, Columbia, Cape Girardeau and Springfield, Mo. The combined organizations will have the third largest deposit market share in the St. Louis area.

With the latest acquisition and other pending Union Planters acquisitions, including one with Paducah-based Peoples First Bank, Union Planters will have approximately $28.5 billion in assets, $19.4 billion in loans, $21.4 billion in deposits and $3 billion in shareholder equity.

Benjamin W. Rawlins Jr., chief executive officer of Union Planters, said, "Our two companies have similar philosophies in many areas, and have developed a number of complementary strategies."

While the merger will result in some overlapping of facilities, the primary benefit will be the ability to leverage delivery systems, product development and technology efforts in a meaningful way, he said.

Magna and Union Planters agreed on some job cuts, particularly in the main offices.

Thomas Anders, chairman and chief executive officer of Magna Group, will serve as vice chairman of Union Planters.

Union Planters was founded in 1869. It is an $18 billion bank holding company with banking offices in eight states. Union Planters has eight other pending acquisitions totaling approximately $3 billion, the largest of which is Peoples First Bank.

The Peoples First acquisition has been in the making for a while, and could be completed in early May, said Andrews. The Peoples First acquisition gives Union Planters presence in western Kentucky and Clarksville, Tenn.