Latest financial breaking news from AP reported that Bank of New York Co. (NYSE : BK, quote) has agreed to take over Mellon Financial Corp. (NYSE : MEL, quote) in a $16.5 billion all-stock deal that will create the world’s largest securities servicing company and one of the biggest asset managers.
The new company, which will be called Bank of New York Mellon Corp., will be the world’s leading asset service with $16.6 trillion in assets under custody. Both companies expect it will result in the elimination of about 3,900 jobs, or nearly 10 percent of their combined work force (within 3 years after the deal closes). The companies expect to cut costs by about $700 million a year with the exercise.
The deal received strong support from investors, who sent New York-based Bank of New York shares up $3.51, or nearly 10 percent, to $38.99 in morning trading on the New York Stock Exchange. Shares in Pittsburgh-based Mellon rose $1.98, or nearly 5 percent, to $42.03 on the NYSE.
Thomas A. Renyi, chairman and chief executive of Bank of New York, will serve as executive chairman of Bank of New York Mellon for 18 months following the close of the deal. On the other hand, Robert P. Kelly, currently president, chairman and chief executive of Mellon, will serve as chief executive of the new company and will succeed Renyi as chairman of the board.
So, I guess that the tradition of mega-mergers which normally happen during end of the year is very true and it’s happening again and I’m pretty sure this will not be the last announcement for this year, 2006.
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December 4th, 2006 by financetwitter
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