BANKAMERICA AND NATIONSBANK TO MERGE
Factfinder, as we know, MPACT supplies EC solutions to both these banks currently. Any thoughts as to how significant this merger may turn out to be for MPACT down the road?
Thanks.
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April 13, 1998 /CNW/ -- BankAmerica Corporation (NYSE: BAC) and
NationsBank Corporation (NYSE: NB) today announced a definitive agreement to
merge in a stock-for-stock transaction that will create the first truly
national United States banking franchise. Combined, this merger of equals will
provide unprecedented capabilities and convenience for individuals, businesses
and corporate clients across the nation and around the world.
The merger, which provides vast revenue potential combined with no
earnings dilution to shareholders, establishes a company that will have
$570 billion in assets, $45 billion in shareholders' equity and a market
capitalization of $133 billion.
Following the merger, which is expected to close in the fourth quarter of
1998, the company will have relationships with 29 million households in 22
states across the nation and serve two million businesses in the United States
and 38 other countries. Its 180,000 people will live, work and participate in
thousands of communities across the country.
Hugh McColl, 62, of NationsBank will be the chairman and CEO of the new
company and will maintain his principal office in Charlotte, NC. David
Coulter, 50, of BankAmerica will be president and maintain his principal
office in San Francisco, CA. Together, they will oversee the strategic
direction of the combined company, which will have the size, scope and
presence to enrich the lives of its customers and enhance the quality of life
in the many communities it serves.
"We've built a truly national franchise with this ideal partnership,"
Coulter said. "Both banks created a rich legacy of customer service,
innovation and a keen sense of competition. The scale we will achieve together
means we will hold market leadership positions in the majority of our business
lines, including strong market share in nine of the 10 largest and fastest
growing states in the country.
"That will create earnings growth that can fuel the future investments
necessary in both our people and technology in ways not possible for either
company alone. Hugh and I believe that the new company cannot help but set the
industry standard for customer service, capabilities and efficiencies.
Together we will have the broadest range of products, delivered by the best
people through the most extensive distribution system in the nation," Coulter
said.
The new company will be managed by a team of six executives, including
McColl and Coulter. The other four are: James H. Hance Jr., 53, of
NationsBank, who will be vice chairman and chief financial officer; Kenneth D.
Lewis, 51, of NationsBank, who will be president of Global Retail Banking;
Michael J. Murray, 53, of BankAmerica, who will be president of Global
Wholesale Banking; and Michael E. O'Neill, 51, of BankAmerica, who will be
president of Financial Services running a portfolio of businesses to be
specified later. He also will be the executive in charge of the transition.
The new board of directors will comprise 20 people, 11 from NationsBank,
including McColl, and nine from BankAmerica, including Coulter, reflecting the
respective ownership percentages in the new company. It is the present
intention of the boards of directors for Coulter to succeed McColl.
"Apart, BankAmerica and NationsBank are the two finest franchises in North
America," McColl said. "Together, we will be America's bank -- at home and
around the world. Our customers will have unprecedented access to capital,
convenience and value, and our communities will benefit from our economic
strength and our dedicated people. Our distribution system is unmatched in
American banking, and our economic diversity and huge capital base provide
great stability. We view this merger as a watershed event in the banking
industry, creating a profitable and aggressively managed national banking
franchise."
"In addition," McColl said, "we will have the most diverse workforce of
any company in America, reflecting the diversity of the thousands of
communities in which we do business. The strength of our company -- and the
strength of our country -- is derived from that diversity, and Dave and I are
committed to creating an environment of success that will enable all of our
teammates to reach their highest personal potential."
The merger agreement, which has been approved by the boards of directors
of both corporations, will create a new holding company called BankAmerica
Corporation. The agreement provides for BankAmerica shareholders to exchange
each of their shares for 1.1316 shares of the new BankAmerica Corporation.
NationsBank shareholders will retain their existing shares, which will
automatically become shares of the new company. All of BankAmerica's series of
preferred stock will be exchanged for preferred stock of the new company with
the same terms and conditions.
The exchange ratio was derived from the relative share price of both
companies at the close of business on April 9, 1998, with no premium paid to
either party. The agreement is subject to shareholder and regulatory
approvals.
It is the desire of the boards of directors that the names of both
companies be retained in one form or another. It is anticipated that the
company will operate with both brands for a period and ultimately will
converge the brands after careful study.
"In any case," Coulter said, "the company colors will be red, white and
blue and will take advantage of the greatest franchise in American banking."
Coulter noted that the combination realizes the dream of BankAmerica's
founder, A.P. Giannini, to "become America's bank. In A.P.'s day the dream was
branches. Now customers have access to branches, ATMs, telephones, PCs and,
soon, television connections. At the same time, BankAmerica's international
franchise will give all customers greater access to an increasingly global
economy."
McColl called the complementary business strengths of the two
organizations "very significant. BankAmerica brings a particularly strong west
and northwest franchise, a significant capital markets capability, strong
mortgage lending and servicing operations, business banking, international
banking and payments capabilities," he said.
"NationsBank has a tremendous franchise in the southeast, southwest,
midwest and mid-Atlantic, as well as a strong capital markets operation and
huge mortgage and business banking businesses."
McColl noted that while expense reductions were not the prime objective of
the merger, the potential exists for efficiencies in the combined expense
base, resulting in a transaction that immediately adds to shareholder value.
www.nationsbank.com
www.bankamerica.com
For further information: Media contacts for NationsBank - Dick Stilley,
Ellison Clary, Martha Larsh or John Cleghorn, 704-388-8217; Media contacts
for BankAmerica - John Keane, 415-622-2773, or Mike Zampa, 415-622-4524 |
