Though there may be widespread branch closings and job cuts in the city she runs, Salt Lake City Mayor Deedee Corradini said she is pleased with the planned merger of Zions Bancorp. and First Security Corp.
In an interview last week, Ms. Corradini said Utah's capital city would become the headquarters of "one of the strongest banks in the country" as a result of the $5.9 billion deal.
"It was just a matter of time before some out-of-state corporation tried to acquire one or both of these banks," Ms. Corradini said. "I'm thrilled that isn't going to happen."
In June, hometown rivals Zions and First Security announced their intention to merge. The merged bank would retain the First Security name.
Because the two companies have substantial overlap in the Utah market, federal regulators are expected to require divestitures of roughly $1.5 billion of deposits. In addition, the companies would probably shutter 40 branches and ax about 1,600 jobs.
As Ms. Corradini sees it, however, job losses are a small price to pay to keep a prominent banking company in Salt Lake City.
"The benefits far outweigh any short-term pain we may see," she said. "To have in our city a corporation this strong, this big, and this involved in the community provides a real economic anchor."
The Salt Lake City metropolitan area, which is home to nearly one million people, has already felt the pain of losing a major corporation to an outside buyer. In August 1998 supermarket giant Albertsons Inc. of Idaho bought Salt Lake City-based American Stores Co.
"That was an unfortunate loss," Ms. Corradini said.
Though mayors generally do not have much authority over banking companies, they can have an impact on pending acquisitions. For example, Indianapolis Mayor Stephen Goldsmith last year hired a top regulatory lawyer to win concessions during the merger between Banc One Corp. and First Chicago NBD Corp. As a result, the new Bank One agreed to create jobs to offset those lost in Indianapolis due to the merger. The company also said it would not leave any vacant downtown office space.
Observers said they would have been surprised if Ms. Corradini had anything but praise for the merger.
"Utah is a very pro-business community," said R. Jay Tejera, an analyst at Ragen MacKenzie Inc. in Seattle. "I don't think you'd run into anything counter to free enterprise."
Nevertheless, Zions president and chief executive officer Harris H. Simmons and First Security chairman and chief executive Spencer F. Eccles, who would be co-CEOs of the new company, apparently understood the importance of Ms. Corradini's approval.
"They called me before they announced the merger and caught me working in the yard," Ms. Corradini said. "The first thing they said was that they weren't calling to complain."
