Firstar Corp. in Milwaukee reportedly plans to merge with Star Banc Corp. of Cincinnati to form another Midwest banking powerhouse.
Although Star is the smaller institution, based on assets, it reportedly will acquire Firstar for more than $5 billion in stock. Star’s market capitalization was $6.2 billion through Monday, about 25 percent above Firstar’s $4.9 billion.
Firstar stock has suffered recently from slow revenue growth and higher-than-expected costs. On Tuesday, its shares rose $4.50, to $38.19. Star stock fell 50 cents, to $63.87.
Spokesmen for the banks declined to comment.
Together, the banks would have about 625 branches in seven Midwestern states and Arizona. Firstar has about 40 branches in the Chicago area, where it is the 10th-largest bank, based on deposits; Star has no Illinois presence, said SNL Securities in Charlottesville, Va.
