FORTUNE Exclusive: Bank One CEO Jamie Dimon Describes Process behind Merger with J.P. Morgan Chase; Haggling over Premium Almost Scuttled Deal
NEW YORK--(BUSINESS WIRE)--01/26/2004--In an exclusive interview with Bank One CEO Jamie Dimon, FORTUNE magazine reports with new details on the difficult, often tortured decision-making behind the $58 billion merger with J.P. Morgan Chase. "Ultimately the 47-year-old Dimon altered the banking landscape by taking less than he almost surely could have wrested from another buyer," reports FORTUNE senior writer Shawn Tully. The story, "The Dealmaker and the Dynamo," appears in the February 9 issue of FORTUNE, on newsstands February 2 and at www.fortune.com.
Hanging up the deal in early January, reports FORTUNE, was price. Dimon wanted a markup of 20-25%, arguing that the big premium wouldn't discount J.P. Morgan stock; Harrison disagreed. Ultimately, he broke the stalemate by offering a small 10% premium.
FORTUNE's Tully also talks to J.P. Morgan Chase CEO William Harrison, who says that David Coulter, a Chase vice president, was never a potential successor. "David is too close in age to become CEO after me," says Harrison, who is 60. "He's here to work with people he likes and build the investment-banking business."
Excerpts from the story:
-- "Two or three times I felt deep anxiety about this deal," says Dimon. "It's terrifying. Do you push the button or not? But if you don't, and this opportunity is gone when you want it later, you've made a horrible mistake. So I pushed the button."
-- "In the long term we'll enrich shareholders a lot more because I didn't get a big premium," brags Dimon. "Okay, so maybe Bank One lost out on $8 billion or so, but we'll take J.P. Morgan's stock to $100 in five years. That will add over $200 billion in market value!"
-- After the merger, reports Tully, the first to call and congratulate Dimon was Sandy Weill, who reminded Dimon that they had tried to buy J.P. Morgan years ago. "One the phone, Sandy said to me either 'You finally got J.P. Morgan' or 'We finally got J.P. Morgan,'" recalls Dimon. "I'm not sure. But if he said 'We,' I should have said, "Whaddya mean 'we'!"
-- Dimon wants to blanket the nation with branches. "I would love to fill in the gaps across the nation by buying more banks," he tells FORTUNE.
-- Dimon insists he'll take a kinder, gentler management approach at the new J.P. Morgan. He tells FORTUNE: "I've gotten along with people at Travelers, Smith Barney, everywhere, and they were all different. After the merger I won't say, 'I want A, B, or C.' I will try it their way. I'll put out ideas and let them work at it."
CONTACT:FORTUNE Jenna Landry, 212-522-4269 jenna_landry@timeinc.com or Caroline Gallagher, 212-522-2134 caroline_gallagher@timeinc.com
SOURCE: FORTUNE |
