Major Financial Institutions Announce Significant Mergers and Spin-offs

Strategic Insights -

Equifax, a leading national credit bureau, has announced plans to split into two independent companies, separating its payment services division from its information services division. Meanwhile, FleetBoston Financial Corp. is acquiring Summit Bancorp in a massive $7 billion deal, marking its entry into the lucrative Internet banking and brokerage services market. Additionally, Danske Bank is buying RealDanmark, Denmark's third-largest bank, for $3 billion in stock, creating one of the Nordic region's largest financial groups. Furthermore, Gulf Canada Resources Ltd. is acquiring Crestar Energy Inc. in a $1.15 billion cash-and-shares deal, solidifying its position as a top player in the Canadian oil and gas exploration industry.

Key Takeaways:

  • Equifax will split into two independent companies, separating its payment services division from its information services division.
  • The payment services division processes approximately 2 billion transactions annually and manages 30 million credit card accounts for clients.
  • FleetBoston Financial Corp.'s acquisition of Summit Bancorp is a $7 billion deal that will replace Summit as New Jersey's largest bank.
  • The acquisition plans to tap into New Jersey's wealthy resident base to market lucrative Internet banking and brokerage services.
  • Reuters
  • FleetBoston is currently the nation's eighth-largest bank with $181 billion in assets and 1,200 branches throughout New England.
  • The acquisition plans to close 85 bank branches in New Jersey and Connecticut, with an unknown number of employees affected.
  • Danske Bank's acquisition of RealDanmark creates one of the Nordic region's largest financial groups with total assets of $155 million and shareholders' equity of $6.8 billion.
  • The combined banks will have 3 million private accounts in Denmark, 150,000 small- and medium-sized corporate customers, and 12,000 big corporate clients and institutional investors.
  • The acquisition ships 500,000 customers online and has a customer base of 3 million in Denmark.
  • Denmark has a population of 5.3 million people.
  • Bloomberg
  • Gulf Canada Resources Ltd.'s acquisition of Crestar Energy Inc. creates one of the top five independent oil and gas explorers in Canada and one of the top 10 in North America.
  • The deal values Crestar at $19.71 a share, based on Gulf's closing price of $5.27 on Friday, a 19% premium over Crestar's share price of $16.56.
  • Gulf will offer 3.333 shares plus $2.15 in cash for each Crestar share.
  • The acquisition will boost Gulf's production by 59% to 278,000 barrels of oil equivalent per day.

Statistics:

  • 2 billion transactions processed annually by Equifax's payment services division
  • 30 million credit card accounts managed by Equifax's payment services division
  • $181 billion in assets held by FleetBoston Financial Corp.
  • 1,200 branches operated by FleetBoston Financial Corp. throughout New England
  • $7 billion value of FleetBoston Financial Corp.'s acquisition of Summit Bancorp
  • $3 billion value of Danske Bank's acquisition of RealDanmark
  • 155 million in total assets held by the combined Danske Bank and RealDanmark group
  • 6.8 billion in shareholders' equity held by the combined Danske Bank and RealDanmark group
  • 5.3 million population of Denmark
  • $1.15 billion value of Gulf Canada Resources Ltd.'s acquisition of Crestar Energy Inc.
  • 278,000 barrels of oil equivalent per day produced by Gulf Canada after the acquisition
  • 586 million barrels of proven oil reserves held by Gulf Canada after the acquisition
  • 3.3 trillion cubic feet of gas reserves held by Gulf Canada after the acquisition

Sources:

  • Reuters
  • Bloomberg