AmSouth to Acquire First American

AmSouth Bancorp agreed to buy First American Corp. for $6.3 billion in stock in a deal that would double the Birmingham, Ala.-based bank’s assets to $40 billion and add 390 branches, for a total of 680 in nine states from Florida to Kentucky. The new bank also would operate the largest automated teller machine network in the Southeast. First American owns more than 98% of IFC Holdings Inc., the nation’s largest third-party marketer of investment and insurance products with an expected $7 billion in sales in 1999. AmSouth said it hasn’t yet determined how many job cuts would be made. Under the agreement, AmSouth will exchange 1.87 of its shares for each of First American’s, valuing the Nashville-based bank at $53.09 a share, a 30% premium based on Friday’s closing prices. AmSouth shares fell $3.94 to close at $24.44 on the New York Stock Exchange. First American shares rose $2.81 to close at $45.63, also on the NYSE. Investors said they were concerned about whether AmSouth, which hasn’t made a large acquisition for more than four years, would be able to achieve projected savings from the merger.