FleetBoston Financial Corp. to buy Summit Bancorp for 2.54 times revenue, The

Weekly Corporate Growth Report, Oct 9, 2000

The Deal: The FleetBoston Financial Corp. has agreed to purchase Summit Bancorp for $7 billion in stock. The acquisition boosts FleetBoston's Northeastern franchise by gaining the No. 1 market share in New Jersey. FleetBoston will now be able to offer money management and brokerage services along with its banking services. After the news of the acquisition was announced, shares of FleetBoston slipped 25 cents to close at $39.00, while Summit shares closed unchanged at $34.50.

Discussion: Summit Bancorp operates nearly 500 offices throughout New Jersey, eastern Pennsylvania and Connecticut. Its three bank subsidiaries provide a full range of services to businesses and consumers; they also offer commercial and private banking. Summit Bancorp engages in securities and insurance brokering, venture capital investments, credit issuance, data processing for its subsidiaries and reinsurance for credit life and disability insurance.

The FleetBoston Financial Corp. is the result of the merger of New England's two largest banks, Fleet Financial and BankBoston. FleetBoston Financial operates about 1,250 branches in the Northeast. The bank provides asset management, insurance, investment banking and mortgage banking, as well as such retail services as checking, savings, loans and credit cards. FleetBoston has significant student and mortgage loan operations; it has some 250 offices in about 25 other countries, with a strong presence in Latin America. Its Quick & Reilly Group, one of the top discount brokerages in the United States, offers online trading to the bank's Internet clients.