Citizens Financial Group Inc.’s parent company, Royal Bank of Scotland Group Plc,
agreed to buy Commonwealth Bancorp Inc. for approximately $450
million in cash to expand in Pennsylvania.
The price is $46.50 a share, 65 percent more than the
Norristown, Pennsylvania-based company’s closing share price
Friday, and about 18 times Commonwealth’s estimated 2002 cash
earnings, Royal Bank said.
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Commonwealth shares rose $17.88, or 64 percent, to $46.00 on
the Nasdaq Stock Market. Royal Bank of Scotland shares fell 90
pence, or 7 percent giving it a market value of $54.4 billion.
Royal Bank of Scotland is focusing on the U.S. to grow
through takeovers because U.K. regulations prohibit more expansion
in its home market. The bank’s Citizens Financial Group Inc. U.S.
unit is the second-largest New England bank after FleetBoston
Financial Corp.
“This is another tactical acquisition for us in the U.S.,
which is totally consistent with our strategy for growing Citizens
through low-risk acquisitions of retail-banking franchises,”
Royal Bank of Scotland Chief Executive Officer Fred Goodwin said.
The U.K. lender bought the consumer-banking network of Mellon
Financial Corp. for $2.2 billion in December. Most of the 345
Mellon branches were in and around Philadelphia and Pittsburgh. In
June, it agreed to buy Medford, Massachusetts-based Medford
Bancorp Inc. for $273 million.
Bloomberg New
