Banc One Corp. to Acquire First Chicago NBD Corp. in $30 Billion Deal

Banc One Corp., a Columbus, Ohio-based bank, is set to acquire First Chicago NBD Corp. in a record-breaking deal worth approximately $30 billion in stock. The acquisition, pending approval, will create the largest bank in the Midwest, with Banc One shareholders owning 60% of the company and First Chicago investors holding 40%. The merged entity will be named Banc One, with its headquarters in Chicago.

Key Takeaways:

• Banc One will acquire First Chicago NBD Corp. in a deal worth approximately $30 billion in stock.
• The acquisition will result in a merged entity named Banc One, with 60% ownership by Banc One shareholders and 40% ownership by First Chicago investors.
• The companies plan to cut $900 million in annual expenses within two years, mainly from their credit card businesses.
• Banc One Chairman and Chief Executive John McCoy will become the CEO and President of the new company, while First Chicago Chairman and Chief Executive Verne Istock will become Chairman.
• The acquisition is part of a larger trend of banks buying each other to boost profits by cutting costs.

Statistics:

• Estimated value of the deal: $30 billion in stock.
• Proposed share exchange ratio: 1.62 Banc One shares for each First Chicago share, or $100.04 based on Thursday's closing prices.
• Planned cost savings: $900 million in annual expenses within two years.
• Ownership distribution: 60% Banc One shareholders, 40% First Chicago investors.

Sources:

• Bloomberg News Service
• The New York Times