The oldest US bank, The Bank of New York, on Monday agreed to purchase Mellon Financial for US$16.5 billion in a bid to create one of the world's largest global asset managers.
The new firm, to be called The Bank of New York Mellon Corp, will rank among the top 10 global asset managers with over US$1 trillion in assets under management, according to a joint statement from the two banks.
The merger will also create "the world's leading asset servicer" with US$16.6 trillion in assets under management and US$8 trillion of corporate funds under trusteeship.
"We are creating one of the world's leading financial services companies," said Bank of New York chairman and chief executive Thomas Renyi, who will serve as executive chairman of the new financial powerhouse for 18 months after the deal's completion.
Robert Kelly, Mellon's chairman, will become the chief executive of the new group and succeed Renyi as chairman of the board.
Terms
Under the deal's terms, Bank of New York shareholders will receive 0.9434 shares in the new company for each Bank of New York share they hold.
Mellon shareholders will gain one share in the new group for each of their Mellon shares.
Executives hope to seal the deal by the third quarter of next year, subject to regulatory and shareholder approvals.
Almost a quarter of the new group's revenues are expected to be derived internationally. The banks' combined revenues are now over US$12 billion.
The companies' combined headcount of 40,000 staff is likely to be reduced by 3,900 through to 2010 following the deal's closure, the banks said.
Founded in 1784, the Bank of New York markets an array of financial services for institutions and individuals.
Pittsburgh, Pennsylvania-headquartered Mellon is a provider of financial services for institutions and wealthy investors, including asset management and private wealth management. The company was founded in 1869.
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