Chase Manhattan Corp. plans to buy commercial and investment bank J.P. Morgan & Co. Inc. for $33.2 billion in stock. The merged bank will be called J.P. Morgan Chase & Co., and will combine two of the country’s oldest, biggest banks.
It also marks one of the U.S. financial services industry’s largest deals. The new banks will have about $660 billion in assets and large, far-flung businesses advising companies on merger and acquisitions and new stock offerings, as well as one of America’s largest commercial and consumer banking operations, according to a report by Reuters news service. The merged banks, however, will still rank third behind the top two U.S. bank holding companies, Citigroup Inc. and Bank of America Corp. in terms of assets.
The acquisition follows numerous industry mergers that have pressured the remaining independent U.S. banks to strike deals or be left behind. Chase has made no secret of its desire to build its investment bank as traditional banking becomes more challenging, while J.P. Morgan has been a rumored takeover target as it loses ground to larger rivals, Reuters reported. Deutsche Bank AG, rumored to have been interested in buying J.P. Morgan, would not launch a counterbid for the U.S. bank, a banking source in Frankfurt told Reuters.
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