The deal will catapult Banc One, based in Columbus, Ohio, into the top league of credit issuers in the US. Combined, the two companies will have a credit card operation with 32 million holders and assets of $35bn.
The stock transaction could herald a consolidation wave in the American credit card industry, some analysts suggested. Last year, Citicorp began negotiations to purchase American Express, it was revealed recently. That approach fizzled out, however.
After a troubled history, First USA has emerged in recent years as a powerhouse among credit card issuers, with its own stock growing an impressive 12 times in four years.
Banc One said it had agreed to offer 1.1659 shares of its common stock, or about $52.61, for each share of First USA. That compares with First USA's closing share price on Friday of $36.75.