Five days after they were reported to be in talks, FleetBoston Financial Corp. announced Sunday evening it agreed to acquire Summit Bancorp for $7 billion in stock, broadening the Boston bank's franchise in New Jersey and the northeast market.
The deal values the Princeton, N.J.-based Summit at $39.78 per share, based on Fleet's $39 share price Friday. Summit shareholders will receive 1.02 shares of Fleet for each share of Summit. Summit's stock closed at $34.375 on Friday.
The transaction will be on a pooling basis, and is scheduled for completion before March 31, 2001, pending shareholder and regulatory approvals. Fleet said the acquisition is expected to be immediately accretive to Fleet's earnings.
The combined company will have approximately $220 billion of assets, and a 20% deposit market share in New Jersey. The $181 billion-asset Fleet is currently ranked fourth in market share with 6.02% in the Garden State, according to recent data from Sheshunoff Information Services' BankSource.
T. Joseph Semrod, chairman, chief executive officer, and president of the $39 billion-asset Summit, would continue to be chairman of the New Jersey bank, and become a vice chairman and FleetBoston director. John G. Collins, a Summit vice chairman, would be the New Jersey bank's president.
Mr. Semrod said, "This acquisition is the right one for Summit, as it provides significant value to our shareholders, our customers, our employees, and the members of our communities."
"This transaction is an excellent geographic fit with our existing franchises, making Fleet the number one bank in New Jersey," said Terrence Murray, Fleet's chairman and chief executive officer.
Mr. Murray added that this deal will expand Fleet's business for the first time into the Philadelphia area.
Summit is currently ranked ninth with a deposit market share of 1.51% in Philadelphia and 10 branches. Sovereign Bancorp of Wyomissing, Pa., is ranked eighth in Philadelphia with 1.72% and 15 branches. Charlotte, N.C.-based First Union Corp. leads that market with 50 branches and a 42.43% market share.
Fleet also said once the Summit deal was agreed, its board of directors cancelled a stock repurchase of up to $2 billion, which had been granted in April this year, to comply with pooling-of-interests accounting rules.
A live conference call has been scheduled for broadcast at 10 a.m. Monday on the FleetBoston web site -- www.fleet.com.
From Our Archive:
- Summit Exemplifies Mid-tier Challenge - September 28, 2000
- Fleet Could Use Summit to Tune Up Revenue Mix - September 28, 2000
- Talk of Purchase by Fleet Sends Summit Stock Up - September 28, 2000
- FleetBoston Financial's 12-month stock performance (Source: Thomson Investors Network)
- Summit Bancorp's 12-month stock performance (Source: Thomson Investors Network)