BIRMINGHAM, Ala. (AP) • Regions Financial (RF) said Thursday it agreed to acquire rival Alabama-based bank AmSouth Bancorp. (ASO) for nearly $10 billion, pricing the deal at a discount to AmSouth's closing share price.
Billed as a merger between two Birmingham banks sharing the same ZIP code, the transaction would create a top 10 U.S. bank that can better compete against bigger rivals.

The combined company would have nearly $140 billion in assets, a market capitalization of about $26 billion and 2,000 branches in the South, Midwest and Texas.

The new company will retain the Regions name, and Jackson Moore, chairman, president and chief executive of Regions, will be chairman.

C. Dowd Ritter, 58, chairman, president and chief executive of AmSouth, will be the president and chief executive of the combined company, which will maintain its headquarters in Birmingham where both companies are based.

Regions will exchange 0.7974 of a share for each share of AmSouth common stock. Based on Wednesday's closing price of $35.53 for Regions, it is paying about $28.33 a share for AmSouth. That is about 2% less than AmSouth's closing price of $28.90 on Wednesday.

The companies said their boards would be combined, but did not say in the news release how large it would be or how many seats each side in the deal would have.

Regions has about $84.6 billion in assets and had a market capitalization as of Wednesday of about $16.2 billion, while AmSouth has total assets of $52.9 billion and a market capitalization of about $10 billion as of Wednesday.

The combined company expects to save about $400 million in costs, of which $150 million is expected to be realized in 2007. Additionally, the combined company expects to incur restructuring costs of approximately $700 million before taxes.

Shares of AmSouth have climbed steadily in the past few weeks and reached a 52-week peak of $29.22 on May 1. The stock traded at a low of $23.85 in October.

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Contributing: Reuters

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