WTNH News Channel 8 / News / 1999

	Fleet Financial Group, BankBoston to merge in $16 billion deal (AP) - Fleet Financial Group Inc. plans to acquire BankBoston Corp. for $16 billion in stock in a deal that will create the nation's eighth-largest bank. The combined bank, to be named Fleet Boston Corp., will be the dominant lender in New England. However, faced with overlapping branches and administrative operations, Fleet Boston may have to cut as many as 5,000 jobs from their total work force of 59,000, executives said Sunday. The need to increase both in size and in breadth has spurred consolidation across financial industries. Last year, banking giant Citibank and the insurance and investment provider Travelers Group Inc. merged to form Citigroup, the nation's largest bank, while Germany's Deutsche Bank AG announced plans to buy Bankers Trust Corp. Sunday's deal is just the latest for BankBoston and Fleet. Last year, Fleet purchased Quick & Reilly, the nation's third-largest discount brokerage firm, and followed it with the acquisition of a large credit card portfolio from Advanta Corp. Fleet, currently the ninth-largest bank in the United States, has total assets of $104 billion. BankBoston, at the same time, expanded its investment banking division with the purchase of San Francisco-based Robertson Stephens last year for $800 million. BankBoston, the nation's 15th-largest bank, has total assets of $74 billion. The deal will strengthen Fleet's international and investment banking business and give BankBoston the muscle it needs to compete against bigger financial institutions. ''The leaders of the next generation (of banks) will have a full complement of financial products to offer,'' said Keith Stock, a New York-based independent bank analyst. The combined bank will initially be headed by Fleet chief executive officer Terrence Murray. After two years, Murray, 59, will step down as chief executive but stay on as chairman, succeeded as CEO by current BankBoston chief executive Charles K. ''Chad'' Gifford, 56. The following year, Gifford will also take over as chairman. Eugene McQuade, chief financial officer for Fleet, said the two banks have had preliminary discussions with regulators and estimate the combined bank will have to divest about $13 billion of their $180 billion in assets. Under the terms of the agreement, BankBoston shareholders will receive 1.1844 shares of Fleet for each BankBoston share they own. The transaction values BankBoston shares at $53.00, a 13 percent premium over Friday's closing stock price of $46.93. Shares of Fleet closed Friday at $44.75, also on the NYSE. BankBoston stock prices have suffered over the past several months because of uncertainty over earnings in Latin America, where the bank has heavy exposure in Brazil and Argentina. The bank, however, said its business has fared well despite the economic troubles. ''Our business and the economies don't have a whole lot to do with each other,'' said Susannah Swihart, chief financial officer of BankBoston. ''We're not lending a lot of money, we're managing a lot of money. We perform very well in periods of turmoil because there's a flight to quality.'' Today's News Page. WTNH Home Page. ©1999 WTNH/WTNH-DT A LIN station.

Fleet Financial Group, BankBoston to merge in $16 billion deal
(AP) - Fleet Financial Group Inc. plans to acquire BankBoston Corp. for $16 billion in stock in a deal that will create the nation's eighth-largest bank.

The combined bank, to be named Fleet Boston Corp., will be the dominant lender in New England. However, faced with overlapping branches and administrative operations, Fleet Boston may have to cut as many as 5,000 jobs from their total work force of 59,000, executives said Sunday.

The need to increase both in size and in breadth has spurred consolidation across financial industries. Last year, banking giant Citibank and the insurance and investment provider Travelers Group Inc. merged to form Citigroup, the nation's largest bank, while Germany's Deutsche Bank AG announced plans to buy Bankers Trust Corp.

Sunday's deal is just the latest for BankBoston and Fleet.

Last year, Fleet purchased Quick & Reilly, the nation's third-largest discount brokerage firm, and followed it with the acquisition of a large credit card portfolio from Advanta Corp. Fleet, currently the ninth-largest bank in the United States, has total assets of $104 billion.

BankBoston, at the same time, expanded its investment banking division with the purchase of San Francisco-based Robertson Stephens last year for $800 million. BankBoston, the nation's 15th-largest bank, has total assets of $74 billion.

The deal will strengthen Fleet's international and investment banking business and give BankBoston the muscle it needs to compete against bigger financial institutions.

''The leaders of the next generation (of banks) will have a full complement of financial products to offer,'' said Keith Stock, a New York-based independent bank analyst.

The combined bank will initially be headed by Fleet chief executive officer Terrence Murray. After two years, Murray, 59, will step down as chief executive but stay on as chairman, succeeded as CEO by current BankBoston chief executive Charles K. ''Chad'' Gifford, 56. The following year, Gifford will also take over as chairman.

Eugene McQuade, chief financial officer for Fleet, said the two banks have had preliminary discussions with regulators and estimate the combined bank will have to divest about $13 billion of their $180 billion in assets.

Under the terms of the agreement, BankBoston shareholders will receive 1.1844 shares of Fleet for each BankBoston share they own. The transaction values BankBoston shares at $53.00, a 13 percent premium over Friday's closing stock price of $46.93.

Shares of Fleet closed Friday at $44.75, also on the NYSE.

BankBoston stock prices have suffered over the past several months because of uncertainty over earnings in Latin America, where the bank has heavy exposure in Brazil and Argentina.

The bank, however, said its business has fared well despite the economic troubles.

''Our business and the economies don't have a whole lot to do with each other,'' said Susannah Swihart, chief financial officer of BankBoston. ''We're not lending a lot of money, we're managing a lot of money. We perform very well in periods of turmoil because there's a flight to quality.''

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