Over the past four years the number, size, and frequency of banking mergers have increased sharply. During the last four months of 1995 alone several large mergers in excess of $1 billion were announced, including the much publicized merger between Chase Manhattan Corp. and Chemical Banking Corp.

The drive to reduce costs and provide higher returns to shareholders is a clear motivation behind many of these transactions. Despite the fact that history tells us this efficiency does not always occur in mergers or acquisitions, there is still a widely held perception that in the case of banks, there are significant cost savings that can be achieved by such combinations.

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