Indianapolis Mayor Stephen Goldsmith says he has grave concerns about the effect the Banc One Corp. takeover of First Chicago NBD Corp. would have on his city.
Mr. Goldsmith met with Michael H. Moskow, president of the Federal Reserve Bank of Chicago, and William Conrad, a Chicago Fed first vice president, last Thursday in Chicago to discuss the planned deal and its effects on Indianapolis. The mayor also said he has discussed the issue with Justice Department officials.
"We are the most adversely affected community," Mr. Goldsmith said in an interview last week, referring to the overlapping operations of the two companies. "This merger has the potential of being quite damaging to our city and to our community."
Banc One and First Chicago officials have acknowledged the overlapping of their operations in Indiana, where both have a substantial presence.
Mr. Goldsmith said he is concerned about issues such as job losses, funding for affordable housing, small businesses' access to capital, economic development, and contributions to civic and charitable causes.
The meeting with Fed officials was at his request, Mr. Goldsmith said, and was intended to help him better understand the process and give him a chance to talk about planned divestitures.
The post-merger Banc One would hold $6.6 billion, or about 46%, of bank deposits in Indianapolis. To allay antitrust concerns, it will be required by the Justice Department to divest as much as $2 billion of deposits.
But the divestiture is just one piece of the deal that concerns Mr. Goldsmith. He said both banking companies have been active in public- private ventures, including the construction of a downtown shopping mall. Indianapolis companies, including Banc One and First Chicago, invested $70 million in the project. The mayor said he wants to make sure the new Banc One, which will have $230 billion of total assets, is committed to Indianapolis.
He is also worried about the deal's effect on competition. "I'm kind of a market-driven guy," Mr. Goldsmith said. "But there are some special issues here because of the noncompetitive aspects."
Mr. Goldsmith said he has discussed his concerns with Joseph D. Barnette Jr., Banc One Indiana Corp. chairman and chief executive officer, and Andrew J. Paine Jr., NBD Indiana Inc. president and CEO. Mr. Goldsmith said both "pledged to address our concerns-and we hope they will, but the clock is ticking."
Mr. Barnette said he does not anticipate the new Banc One will be any less committed to Indianapolis. "We have shown we continue to be serious about community leadership and philanthropy," he said, "and we don't anticipate that will change with the merger."
Mr. Barnette also said the mayor should not worry about an adverse effect on competition because whatever bank buys the divested deposits will become third-largest in the city behind Banc One and National City Corp. Mr. Paine, who will retire at year's end, could not be reached to comment.
A spokeswoman for the Chicago Fed confirmed that its officials met with Mr. Goldsmith but declined to comment on the meeting.
Mr. Goldsmith said he will be closely watching the deal's development. "We're going to be active and worried for a while," Mr. Goldsmith said.