Firstar Corporation of Milwaukee has agreed to merge with U.S. Bancorp of Minneapolis through an exchange of shares valued at $21.2 billion, Firstar announced last week. The transaction, in which Firstar will exchange 1.265 shares of common stock for each share of U.S. Bancorp common stock in a tax-free exchange, is expected to close in the first quarter of 2001, Firstar said.

The combined company will operate under the U.S. Bancorp name and will be based in Minneapolis, according to Firstar. It will be the eighth largest bank holding company in the U.S., with $145 billion in assets under management, Firstar said.

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