CHARLOTTE, N.C. — Bank of America has signed a definitive agreement to purchase all outstanding shares of National Processing Inc. (NYSE: NAP) for $1.4 billion in cash.
Under the agreement, Bank of America will combine National Processing Inc.'s National Processing Co. LLC with Bank of America Merchant Services to create the nation's second-largest credit card processing card company in terms of volume, according to a report in Louisville Business First.
Bank of America (NYSE: BAC) plans to base the new unit in Louisville, where National Processing has its headquarters. The combined company will have nearly $250 billion in annual processing volume, including about $70 billion from Bank of America.
The merger must be approved by National Processing shareholders and receive regulatory approvals. The largest shareholder is Cleveland, Ohio-based National City Corp. (NYSE: NCC), which owns 83 percent of the outstanding stock in National Processing. The deal is expected to close in 2004's fourth quarter.
National Processing shareholders will receive $26.60 per share. The company's stock, which had risen in recent weeks after the company announced that it was considering a sale, fell $3.15 per share on July 13 to $26.25 per share.
David Fountain, chief financial officer for National Processing, said the combined company will have a larger share of the merchant processing market and that Bank of America's national presence will allow the company to grow its business.
He added that many of the details of the merger have not been worked out.
