JP Morgan Chase to Acquire Bank One Corporation for 2.62 Times Revenue

Weekly Corporate Growth Report, Jan 26, 2004

The Deal: JP Morgan Chase & Company has agreed to acquire Bank One Corporation for $58 billion in stock. The deal requires approvals from shareholders and from state, federal, and foreign regulatory agencies. The transaction is expected to close in mid-2004. The combined bank will retain the JP Morgan Chase & Co. name.

Discussion: Bank One is the sixth-largest bank in the United States. The bank operates about 1,800 bank branches in 14 midwestern and southern states. The company's business activities include consumer, corporate, and institutional banking; lease financing; investment management; brokerage; insurance; and consumer finance, including mortgages and student loans.

JP Morgan Chase is the second-largest financial services firm in the United States. The company was created in 2001 by the merger of retail bank Chase Manhattan and investment bank JP Morgan. JP Morgan Chase operates in over 60 nations. The company provides a wide range of financial services including investment banking, asset management, and private and consumer banking.

The combined bank will have assets of $1.08 trillion, bringing it close to the industry leader Citigroup's $1.2 trillion. The two banks expect the merger to create a cost savings of $2.2 billion in the first three years of business at the merged company. Merger related expenses are expected to be around $3 billion.