13 september 2000

chase manhattan may acquire jp morgan for $30 billion
new york: in a move that could end the independence of, arguably, the most blue chip name of wall street, jp morgan, set up by the legendary financier j pierpont morgan, us bank, chase manhattan, is said to be in talks with the investment banking firm for a possible acquisition.

the deal for the possible takeover of the investment banking firm by chase, is said to be valued at $30 billion. speculation about the investment bank's future was already fuelled when it emerged that mr. sandy warner, its chairman and chief executive officer, had cancelled an appearance at an investor conference this week.

the deal, if completed, would further transform the global financial services industry. it would also be a long-sought transformation for chase, which has been looking to expand its investment banking reach, particularly in equities. however, if the deal does fructify, given the fact that there is enormous amount of overlap between the two firms, in the areas of fixed income and trading activities, there is likely to be substantial job losses on the takeover.

while a string of global banking mergers has fuelled a sharp speculative rise in the value of jp morgan's stock in the last three months, industry analysts say that chase is paying too high a price for the acquisition.

some of the more prominent recent takeovers of investment banking firms include, ubs's $12bn acquisition of painewebber, credit suisse first boston's $11.5bn bid for donaldson lufkin and jenrette, and citigroup's $31.1bn offer for associates first capital.

jp morgan has also been in the news recently for the resignation of its high profile, and much valued, chief financial officer, mr. peter hancock .

for chase manhattan, which has been on an acquisition spree in the recent past, this deal would be the biggest. in may, chase bought the beacon group, a mergers and acquisition boutique, for about $500m, two months after it announced the $7.75bn purchase of robert fleming, the uk investment bank and asset management business. a little over a year ago it paid $1.35bn for hambrecht & quist, the west-coast investment bank

go to finance diary index page