The mere prospect of a merger between Fleet Financial Group and BankBoston Corp. is raising questions about their ability to overcome regulatory objections.

New England's two biggest banking companies, according to a source citing documentation from their merger advisers, would have to divest $10 billion to $15 billion of deposits to satisfy regulators' concerns about market domination.

Though divestitures are routine in major bank deals, none has ever approached these amounts. Some experts see this as a deal breaker.

But given the recent megamerger announcements, which would create institutions far bigger than the hypothetical "new Fleet," perhaps the old measures of market concentration and interpretations of antitrust law will have to be revisited or revised. Or creative lawyers will find a way to effect the changes they seek.

"Almost anything is feasible," said Bernard Shull, professor of economics at Hunter College in New York, a close observer of merger trends who has concluded that antitrust laws over time have become less and less of a constraint on the banking industry.

"I take the possibility of this merger very seriously," said Gerard Cassidy, analyst with Tucker Anthony in Portland, Maine. "With all the changes in banking in just the last few weeks, CEOs are having to contemplate deals they never would have thought about five years ago."

To be sure, a Fleet-BankBoston deal would trigger legal alarms. Their combined deposits would be 40% of the total in Massachusetts, 48% in Connecticut, and 66% in Rhode Island, according to SNL Securities.

Federal law sets a 30% cap within any state, but two New England states modified that. Massachusetts lowered it to 28%-going up to 30% on July 1- and New Hampshire to 20%.

Meanwhile, the Justice Department and Federal Reserve Board measure competition in metropolitan markets according to the Herfindahl-Hirschman Index, the sum of the squares of all participants' market shares. Index scores above 1,800 invite scrutiny. Already in the red zone are Providence (2,792), Hartford (2,170), and Portland (2,041).

Boston (at 1,356), Barnstable-Yarmouth, Mass. (1,669), and Springfield, Mass. (1,141), could exceed 1,800 if Fleet and BankBoston merged.

"I have some real doubts" about the combination, said a New York lawyer. "We have never had a situation where there are only two banks in a market and you want to go down to one."

"This could well be the deal where the feds say 'no,'" said a dealmaker who has been involved in some of banking's biggest.

A huge deposit selloff might not please Fleet or BankBoston executives. It could be the nucleus for a new competitor against them, and there may not be enough buyers to bid up the premiums to levels in other markets.

In the aftermath of the NationsBank-Barnett deal in Florida, in which $4.1 billion was sold, Huntington Bancshares acquired 60 Barnett branches for a 20.1% premium, and SouthTrust Corp. bought another 60 for 17%.

But Fleet and BankBoston might settle for less if they really want to merge. "It gravitates from a great deal to a good deal," Mr. Cassidy said.

Fleet sold $3.2 billion of deposits to seven institutions around New England when it acquired Shawmut National Corp. in 1995, with premiums ranging from 5.2% to 6.3%.

Though today's premiums would likely exceed those, there could still be antitrust and divestiture hurdles.

In contrast to Florida, where NationsBank Corp. had many potential buyers of divested branches, the third-largest bank in Boston, State Street Corp., is primarily a wholesale institution. Citizens Financial Group of Providence, R.I., which has $17 billion of assets, probably could not swallow the entire Fleet-BankBoston selloff.

"If you can get the Fed and Justice Department to buy off on satisfactory divestitures that solve the problem in every individual market, then under the antitrust laws that should be sufficient," said Michael A. Greenspan, partner in the Washington office of the Thompson Coburn law firm.

"It would be exceedingly difficult for regulators to swallow that big of a concentration," said Gilbert T. Schwartz, a partner at the Washington law firm of Schwartz & Ballen. "They would have to do such significant divestitures that it would be throwing the baby out with the bathwater."

But there could be what antitrust experts call mitigating factors.

The banks could argue that they need to get bigger to face ever-bigger rivals. Prof. Shull said this argument was rejected by the Supreme Court in the landmark Philadelphia National Bank case of 1963.

Or they might say that "potential competition" has not been closed off. Perhaps the combined BankAmerica-NationsBank will enter New England.

Steven C. Sunshine of Shearman & Sterling, who was formerly in charge of bank mergers at the Justice Department, said a big in-market merger may not hurt competition for consumers and small businesses, which are served by community banks, credit unions, and thrifts. Larger businesses may feel an impact, but they tend to shop nationally, so a single market's concentration matters less.

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