PNC Financial Services Group Inc. said Friday it is acquiring National City Corp. for $5.58 billion, the first bank to use fresh investments from a federal bailout program to make an acquisition.
The deal comes within hours of PNC Financial receiving approval for $7.7 billion in cash from the government under the $700 billion government program aimed at relieving the ongoing credit crisis.
The agreement is the latest deal in the rapidly consolidating banking industry. It combines Pittsburgh-based PNC, which has weathered the ongoing credit crisis better than most regional banks, with National City, a large, Cleveland-based regional bank weighed down by high-risk mortgage loans.