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Midwestern bank

Fifth Third Bancorp

(FITB) - Get Fifth Third Bancorp Report

said Monday that it had agreed to buy

Old Kent Financial

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, a financial holding company headquartered in Michigan, in a stock deal valued at $4.9 billion.

Under the terms of the deal, Cincinnati-based Fifth Third will exchange 0.74 share of its common stock for each share of Old Kent stock. The deal values Old Kent Financial shares at $35.56, or a 42% premium based on Friday's closing prices.

The deal is expected to close in the second quarter of 2001, and immediately add to Fifth Third's earnings. The deal will add about 11% to Fifth Third's projected earnings per share in 2001, the company said in a statement.

The combined company will shave about 20% off Old Kent's operating expenses over three years.

The deal will result in charges of $235 million after taxes. The merged company will have $43.8 billion deposits and 980 banking locations in the U.S. Midwest.