Westpac and St George will announce terms for their merger first thing this morning. Neither side appears to have definitively leaked the pricing terms that will be disclosed in an hour or two, with one median estimate (for example, in the Financial Review) from 24 hours of chatter in the order of 1.3 Westpac shares for each St George share (equivalent to about $34), or a premium of about 28 per cent to the closing price of St George on Friday. Some other estimates are a fraction higher than this.As is now widely known, Westpac instigated the talks late on Friday afternoon. After a busy weekend, the two management teams and their advisers needed one more day to finalise details of the agreements.As for the strategic rationale for the union, in theory that's clear enough: banking is a scale business, and if it's within the competence of the united management team at the combined back to extract long-term savings from the head office, information technology and operational cost base of St George then the takeover will pay for Westpac.Rather surprisingly, there are not - based on yesterday's rhetoric - plans by Westpac to take out as many costs at St George as some think plausible.The stated position of Westpac, in a media release yesterday morning, is that there will be "no net reduction" in branch numbers (or ATM numbers for that matter). There's no real discussion yet of other cost savings strategies.This position of retaining branches is no doubt central to Westpac's strategy to steer the bid for St George through the approval of the Australian Competition and Consumer Commission and then the Treasurer (as well as shareholders, who have to vote on a scheme of arrangement, staff of each bank and the court of public opinion).On the face of it this stance is a little odd. Commonwealth Bank achieved savings of well in excess of 30 per cent, and pushing 40 per cent, from the cost base of Bank of New South Wales when CBA bought Colonial, including State Bank, in 2000.Of other comparable regional bank takeovers, Bendigo Bank has much more modest savings targets from its recent takeover of Adelaide Bank. The last large takeover of a regional bank before that was St George's own takeover of Advance in 1997.Whether Westpac is being too conservative on the potential cost savings may inform the assessment of alternative bidders for St George.The two banks and their respective advisers are, naturally, confident no other bidder will crash this party.The line of thinking goes that no-one else can analyse the value in St George as effectively as Westpac (given the latter's CEO used to run the former as recently as nine months ago); bank mergers only work when each side not only agrees but also is enthusiastic; and that in current market conditions only Westpac has the price to earnings multiple in its share price to make a deal work.