FMER Firstmerit Corp. (MM)

In an agreement related to Huntington Bancshares Inc.'s purchase of fellow Ohio bank FirstMerit Corp., the U.S. Justice Department said it has approved the sale of 13 FirstMerit branches to resolve antitrust concerns.

The stock-and-cash deal was worth $3.4 billion when it was announced in January.

In an emailed statement, Huntington said "we are pleased the Department of Justice has approved the required divestiture" of the branches "so that the approval process for Huntington's acquisition of FirstMerit can continue moving forward."

The acquisition is subject to Federal Reserve approval.

The accord with the Justice Department includes restrictions on noncompete agreements with branch managers and loan officers.

U.S. bank deal activity in 2015 hit the highest level since the financial crisis as larger lenders have tried to become more efficient by getting bigger. But bank mergers face some hurdles including regulatory scrutiny.

In April, KeyCorp and First Niagara Financial Group Inc. agreed to sell 18 branches in connection with their pending $4.1 billion merger, which received Federal Reserve approval on Tuesday.

Huntington has assets of about $73 billion, while FirstMerit has assets of around $26.1 billion. The 13 branches that will be sold have about deposits of about $737.8 million.

In the first part of the Fed's annual stress tests released in June, Huntington's common equity Tier 1 ratio, which is a measure of high-quality capital as a share of risk-weighted assets, was 5%, the lowest of 33 banks on the list.

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

July 13, 2016 21:45 ET (01:45 GMT)

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