BANKING ON MERGER; FIRST UNION, CORESTATES LATEST FIRMS TO CONSOLIDATE.Byline: Timothy L. O'Brien Timothy L. O'Brien (1961- ) is an American journalist who has written for The Wall Street Journal, The New York Times, and Talk Magazine. A graduate of Georgetown University and Columbia University, O'Brien has specialized in articles about Russia, The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times Two of the nation's biggest banking companies, First Union Corp. of Charlotte, N.C., and Corestates Financial Corp. of Philadelphia, have agreed to merge in a $17.1 billion deal. The combined bank would have the largest share of bank deposits in New Jersey and Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York , and a branch network spanning the East Coast from Florida to southern Connecticut. The purchase by First Union is the highest price ever paid for a U.S. bank. And it leaves Philadelphia, the nation's first banking capital, without a major bank that calls it home. The deal, which Corestates rejected only a few weeks ago, was announced after the stock market closed Tuesday. The combined bank will have about $204 billion in assets and the first-, second- or third-largest share of deposits in 21 of the 30 largest East Coast metropolitan areas. Analysts said they expect the merger will result in sweeping cost-cutting measures, including substantial layoffs. The takeover is not big enough, however, to vault vault, ceiling over a room, formed in any one of a variety of curved shapes. Nature of Vaults A vault is generally composed of separate units of material, such as bricks, tiles, or blocks of stone, so shaped or cut that when assembled they form a First Union out of its spot as the sixth-largest bank in the country. Yet it is the latest milestone in the continuing consolidation of the banking industry. The deal also illustrates the unusual influence wielded by bank chief executives when it comes to merger negotiations. Corestates, which is based in Philadelphia, rejected an $18 billion takeover offer from Mellon Bank Corp. of Pittsburgh last month largely because Corestates' chairman and chief executive, Terrence A. Larsen, was not guaranteed a role in the merged bank. That will not be the case when First Union takes control, even though the bank will keep the First Union name. Although First Union's chairman and chief executive, Edward E. Crutchfield, will be running the new bank, Larsen will serve as vice chairman in charge of the new bank's corporate banking and northeastern and mid-Atlantic regional operations. First Union will exchange 1.62 shares for each Corestates share. Based on Monday's closing stock prices, that values Corestates at $84.95 a share, or $17.1 billion - a 17 percent premium. Trading in the shares of both companies was halted Tuesday as speculation that a deal was imminent grew. Before trading was halted, shares of Corestates rose $6.50, or nearly 9 percent, to $79, while First Union shares fell $2.1875, or 12.5 percent, to $15.25. BY THE NUMBERS The top U.S. bank deals: NOV judgment notwithstanding the verdict (N.O.V.) n. reversal of a jury's verdict by the trial judge when the judge believes there was no factual basis for the verdict or it was contrary to law. The judge will then enter a different verdict as "a matter of law. . 18, 1997: First Union Corp. announces plans Tuesday to buy CoreStates Financial Corp. for $16.1 billion. AUG. 29, 1997: NationsBank Corp. announces it will buy Barnett Banks Barnett Bank, founded in 1877, eventually became the largest commercial bank in Florida. It was purchased by NationsBank in 1997, but even before signs on Barnett's branches were changed, NationsBank merged with BankAmerica Corp., creating Bank of America. Inc. for $14.6 billion. APRIL April: see month. 1, 1996: Wells Fargo Wells Fargo armored carriers of bullion. [Am. Hist.: Brewer Dictionary, 1147] See : Protectiveness Wells Fargo company that handled express service to western states; often robbed. [Am. Hist. & Co. buys First Interstate Bancorp First Interstate Bancorp was a bank based in the United States that was taken over in 1996 by Wells Fargo. It was headquartered in Los Angeles. The name has continued to be used in the banking world by used after the merger by First Interstate Bank who had been using the for $14.2 billion. APRIL 1, 1996: Chase Manhattan Corp. merges with Chemical Banking Corp. for $13 billion. AUG. 4, 1997: First Bank System buys US Bancorp for $9.8 billion. CAPTION(S): Box BOX: BY THE NUMBERS (see text) |
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