The takeover of Mercantile is expected to propel PNC into the top ten largest US banks in terms of market capitalization, the bank said in an official statement.
However, following the deal shares in PNC reportedly fell by as much as 4.4 per cent on Monday, with investors apparently concerned that the premium paid on shares was too high.
Commenting on the agreement, though, PNC's chairman James Rohr was undeterred.
"Mercantile is a storied franchise and a perfect fit for PNC," he said in a statement.
"Its location, wealth management business and relationship-based banking model will add to PNC's strengths and ability to grow profits."
As part of the deal, the current Mercantile chairman, president and chief executive Edward Kelly will become the new PNC vice chairman â a move expected by the end of 2007's first quarter.