Like we told you days ago , consolidation in the financial services sector appears to be taking hold.
On Friday PNC Bank agreed to buy ailing NationalCity Corp. in a government-supported $5.6 billion deal that will rescue the Ohio-based lender and create the No. 5 U.S. bank by deposits.
The transaction is the first to occur since government officials signaled earlier this week that they would allow banks to use the government capital infusion to acquire weaker rivals.
National City joins Bear Stearns, Wachovia Corp and Washington Mutual as another U.S. financial firm that has been swallowed up by lenders considered healthier.
The takeover is happening in tandem with PNC’s plans to access $7.7 billion from the Treasury’s Troubled Assets Relief Program. In exchange for the money PNC will issue preferred shares to the Treasury.
Then late Friday word surfaced that the government is expected to shortly announce a list of about 20 banks in the next round of companies receiving capital injections under a $700 billion rescue package.
Some market mavens are wondering if this could be the beginning of a takeover mania. The money is there and it looks like it’s having an effect, says CNBC’s Liesman. “But it’s coming out in drips and drabs instead of one big avalanche.”
Earlier in the week Liesman told the Fast Money traders that banks likely to drive the merger initiative could include Fifth Third, BB&T , and SunTrust Banks – the so called super-regional banks.
He also said some other likely takeover candidates could be KeyCorp , Comerica and First Horizon .
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CNBC.com with wires