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MELLON TO ACQUIRE THE BOSTON COMPANY FROM SHEARSON LEHMAN BROTHERS

 MELLON TO ACQUIRE THE BOSTON COMPANY FROM SHEARSON LEHMAN BROTHERS
 BOSTON, Sept. 14 /PRNewswire/ -- Mellon Bank Corporation (NYSE: MEL) announced today that it has reached a definitive agreement with Shearson Lehman Brothers, a subsidiary of the American Express Company (NYSE: AXP), to purchase The Boston Company, a Shearson subsidiary based in Boston.
 The acquisition will enhance substantially the corporation's existing position as a leading provider of trust, investment, and private banking services, and will place Mellon among the leading providers of mutual funds administration services.
 Upon completion of the acquisition, Mellon will rank among the top five competitors in each of these businesses and will have approximately $650 billion in assets under administration, including more than $115 billion in assets under management.
 "We are delighted by this merger of two of the premier providers of trust, investment and private banking services in the United States," said Frank V. Cahouet, chairman, president and chief executive officer of Mellon Bank Corporation.
 "Mellon and The Boston Company have complementary strengths which, when combined, will create a leading competitor in the trust industry and in each of its component businesses. This is a unique opportunity to strengthen Mellon's competitive position in businesses that are central to our long-term strategy."
 Under the terms of the agreement, which has been approved by the boards of directors of Mellon Bank Corporation and Shearson, Mellon will purchase The Boston Company for $1.453 billion through a combination of $1.301 billion in cash, $115 million in Mellon common stock and $37 million of warrants. These 10-year warrants enable Shearson to purchase 3 million common shares of Mellon Bank Corporation common stock at $50 per share.
 To finance the transaction, the corporation expects to issue approximately $150 million of common stock in addition to that being issued to Shearson; approximately $150 million in perpetual preferred stock; and approximately $815 million in senior debt. Mellon expects to raise the bulk of the remaining financing through retention of earnings over the next three quarters.
 Excluding a one-time charge associated with the transaction, Mellon expects the acquisition of The Boston Company to be substantially accretive to earnings in 1993 and future periods.
 At June 30, 1992, The Boston Company had assets of $9.2 billion. In consolidating The Boston Company, Mellon Bank Corporation expects to restructure the combined balance sheet, principally through a reduction in money market investments and investment securities. The corporation anticipates that its total assets, after consolidation, will be approximately $32.5 billion.
 The corporation's capital ratios after consummation of the transaction and balance sheet restructuring are expected to be comparable with those at June 30, 1992.
 In connection with the transaction, the corporation expects to book a one-time after-tax charge to earnings of $112 million, reflecting various consolidation expenses. The loss is expected to be booked at closing, which is anticipated in the first quarter of 1993, pending regulatory approval.
 At June 30, 1992, Mellon Bank Corporation's ratio of nonperforming assets to total loans and net foreclosed property was 4.4 percent, and The Boston Company's was 3.1 percent. Acquisition of The Boston Company is expected to result in a slight improvement in Mellon's ratio.
 Upon completion of the sale of The Boston Company to Mellon Bank Corporation, John R. Laird, chairman and chief executive officer of The Boston Company, will step down from those positions. He remains president and chief executive officer of the Shearson Lehman Brothers Division of Shearson. In addition to his current responsibilities as a vice chairman and a director of Mellon Bank Corporation, W. Keith Smith will become chairman and chief executive officer of The Boston Company, and will have responsibility for the combined operation.
 William J. Nutt will continue as president of The Boston Company, and, along with Smith and Robert M. Boyles, executive vice president and head of Mellon's Trust and Investment Department, will manage the process of merging the two organizations and play a major role in the combined company going forward.
 The Boston Company and Boston Safe Deposit and Trust Company names will be retained, as will the board of directors of The Boston Company.
 "Mellon has long been a leader in trust and other fee-based businesses and, consistent with our corporate strategy, has targeted these businesses for investment and growth," said Smith, who, as vice chairman, heads Mellon's Service Products sector, comprising trust and Mellon's other fee-based businesses, including cash management, information services, and mortgage banking.
 "We have been most impressed with The Boston Company and its people, and this merger is a dramatic step in fulfilling our strategy. When it is completed, Mellon will have a uniquely balanced revenue stream, deriving roughly equal revenues from interest margin and service fees."
 "We are delighted to join forces with Mellon," said Nutt. "Our businesses obviously fit well with their strategy, and our cultures are similar and compatible. The Boston Company will bring many strengths to Mellon. We are confident of our ability to make a major contribution to Mellon's success and are excited at the opportunity to combine our two strong organizations."
 Pittsburgh-based Mellon Bank Corporation, founded in 1869, is one of the nation's 25 largest bank holding companies. Through its subsidiaries, it engages in three core businesses:
 -- Service Products, through which it provides trust and investment; cash management; information services; and mortgage banking throughout the United States and in selected international markets;
 -- Retail Banking, through which it serves consumers and small businesses in the Central Atlantic states of Pennsylvania, Delaware and Maryland -- with more than 400 branch offices -- and operates a regional credit card business through its Delaware banking subsidiary; and
 -- Wholesale Banking, through which it serves large corporations and financial institutions throughout the United States and in selected international markets, and mid-sized companies in the Central Atlantic region.
 The Boston Company, an international financial services firm founded in 1865, offers mutual funds administration, institutional trust and custody, institutional investment management, and private banking services, principally through offices in Boston, New York, California and London. The Boston Company is a wholly owned subsidiary of Shearson Lehman Brothers, a subsidiary of American Express Company.
 /delval/
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 /Editors Note No. 1: Mellon Bank Corporation will hold a press briefing today, and analysts' meetings later today and early tomorrow, to discuss its purchase of The Boston Company. The press briefing will take place at the Boston Harbor Hotel, 70 Rowes Wharf, today, Sept. 14, at 11:15 a.m. Principal speakers will be Frank V. Cahouet, chairman, president and chief executive officer of Mellon Bank Corporation; W. Keith Smith, vice chairman of Mellon Bank Corporation, who will assume the additional role of chairman and chief executive officer of The Boston Company; and William J. Nutt, president of The Boston Company. Reporters with questions on the briefing should contact J.T. Tuskan, Mellon Bank Corporation Media Relations, at 412-234-0850./
 /Analysts Note: Analysts' meetings will be held in New York and Boston with presentations by Frank V. Cahouet, chairman, president and CEO of Mellon Bank Corporation, and/or W. Keith Smith, vice chairman, Service Products, Mellon Bank Corporation; and Steven G. Elliott, vice chairman and chief financial officer of Mellon Bank Corporation. The New York meeting will take place at The Pierre Hotel, Two East 61st St. (between Madison and Fifth) today, Sept. 14, at 4 p.m. The Boston breakfast meeting will be held at Le Meridian Hotel, 250 Franklin St., on Tuesday, Sept. 15, at 8 a.m. Analysts with questions about these meetings should contact Kevin Stitt, Mellon Bank Corporation Investor Relations, at 412-234-4633./
 /Editors Note No. 2: The following attachment describes the key businesses in which The Boston Company engages, and details Mellon's competitive position in these businesses before and after the transaction.
 MELLON'S POSITION IN KEY BUSINESSES
 BEFORE AND AFTER TRANSACTION
 Assets Under Management or Administration
 BUSINESS Before Transaction After Transaction
 Mutual Fund Administration
 Administrative services for
 mutual funds, limited partner- N/A(A) $136 billion
 ships and unit trusts
 Institutional Trust and Custody
 Master Trust (recordkeeping for
 a number of related investment
 portfolios, such that the entire
 set may be viewed as a whole) and $277 billion $400 billion
 custody (holding securities,
 collecting interest and dividends,
 and recordkeeping for customers'
 portfolios)
 Institutional Investment Management
 Investing and managing money of
 institutions (corporations, pension $ 67 billion $ 96 billion
 funds, etc.)
 Private Banking
 Investment and custody $ 25 billion $ 35 billion
 for high net worth individuals
 (A) Mellon has only a minimal presence in this business.
 NOTE: Numbers are approximate at 6/30/92./
 /CONTACT: Thomas W. Butch, 617-722-3550, J.T. Tuskan, 412-234-0850, media, Charles M. Johnston, 412-234-5601, all of Mellon Bank Corporation; Steven Faigen of Shearson Lehman Brothers, 212-298-4379/
 (MEL AXP) CO: Mellon Bank Corporation; The Boston Company; Shearson Lehman
 Brothers; American Express Company ST: Pennsylvania, Massachusetts IN: FIN SU: TNM


PT -- PG001 -- 9085 09/14/92 11:13 EDT
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