Royal Bank of Canada subsidiary RBC Centura Inc said on Thursday it has agreed to acquire Alabama National BanCorporation in a deal valued at $1.6 billion.

RBC, which expects the deal to close in early 2008, said Alabama National shareholders may choose to receive $80 per share in cash, RBC shares, or a combination of each.

According to RBC, the acquisition will make a significant contribution to revenue growth in the near term and will be accretive to its earnings in 2009.

Alabama National is the parent of 11 subsidiary banks and other affiliated businesses in Alabama, Florida and Georgia.

Shares of Alabama National closed at $53.12 on Nasdaq on Wednesday, while Royal Bank of Canada shares closed at C$54.00 on the Toronto Stock Exchange.

($1=$1.06 Canadian)