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PNC FINANCIAL SERVICES GROUP, INC. 8-K Report, Material Agreement (Jun 20, 2011)

Filed June 20, 2011For Securities:PNC

Summary

PNC Financial Services Group, Inc. (PNC) announced on June 20, 2011, that it has entered into a Stock Purchase Agreement to acquire 100% of the shares of RBC Bank (USA) from Royal Bank of Canada (RBC) for $3.45 billion. This strategic acquisition is expected to expand PNC's presence and customer base. The transaction includes a post-closing adjustment based on tangible book value, and PNC has the option to pay a portion of the purchase price in PNC common stock, up to a specified limit. RBC Bank will be merged into PNC Bank, National Association, following the closing of the acquisition. The acquisition is subject to customary closing conditions, including regulatory approvals. Both parties have entered into various covenants related to the operation of RBC Bank prior to closing and post-closing restrictions on competition and employee solicitation. This move signifies PNC's commitment to growth and integration within the banking sector.

Key Highlights

  • 1PNC is acquiring 100% of RBC Bank (USA) from Royal Bank of Canada for $3.45 billion.
  • 2The purchase price is subject to a post-closing adjustment based on tangible book value.
  • 3PNC has the option to pay up to $1 billion of the purchase price using PNC common stock.
  • 4RBC Bank will be merged into PNC Bank, National Association, after the acquisition closes.
  • 5The transaction is subject to regulatory approvals and other standard closing conditions.
  • 6Covenants include operational standards for RBC Bank pre-closing and restrictions on competition and employee solicitation post-closing for both parties.

Frequently Asked Questions

The total value of the acquisition is $3.45 billion, which is subject to a post-closing adjustment based on the tangible net asset value of RBC Bank at the time of closing.

PNC intends to pay for the acquisition primarily in cash, but has the option to pay a portion of the purchase price with shares of PNC common stock. The amount of stock issued will not exceed $1 billion in value or 4.9% of PNC's outstanding shares immediately after closing.

Immediately following the closing of the Stock Purchase, RBC Bank will be merged into PNC Bank, National Association, with PNC Bank continuing as the surviving entity.

The completion of the acquisition is subject to several conditions, including the receipt of required governmental approvals, the absence of any legal prohibitions, the accuracy of representations and warranties from both parties, and compliance with their respective obligations under the Stock Purchase Agreement.