Merger Mania: Handicapping the Field

Who's next?

That's the No. 1 question on bankers' minds after this summer's dramatic string of megamergers.

And, if analysts who follow the biggest players are correct, the most likely marriage on the horizon involves Wells Fargo & Co. and First Interstate Bancorp. The probability: a hefty 65%, according to 10 analysts surveyed by the American Banker (see table on back page).

Other Matches Much Less Likely

But some other blockbuster weddings bandied about over the past few weeks are given much longer odds. The likelihood of Citicorp and Chase Manhattan Corp. getting together within two years was put at just one in five. Even less probable, the analysts said, is a trip to the altar by First Chicago Corp. and Continental Bank Corp.

Some analysts think the focus will now shift back from national players to the regional level for at least a while. A pair of major regional moves -- the acquisition of Cleveland's Ameritrust Corp. by rival National City Corp., and a merger of Bank of Boston Corp. and Shawmut National Corp. -- are assessed as the next most likely deals a combination would be its hammerlock on Florida, which is one of the country's fastest-growing banking markets. Barnett already enjoys dominant market share in Florida, while First Union is tied with SunTrust for the No. 2 spot.

"You would have in Florida the equivalent of BankAmerica in California," said J. Frederick Meinke of Raymond James & Associates Inc., St. Petersburg, Fla.

Oil and Water

But corporate culture would be a major obstacle to such a merger. First Union operates as a highly centralized holding company, while Barnett still grants wide autonomy to its subsidiary banks. Melding the two would be an enormous challenge.

Valley National Corp., Phoenix, the largest independent bank remaining in Arizona, has sharply denied reports it might sell out. But the acquisition of Security Pacific will give BankAmerica the top market share in the state.

Norwest, the largest bank in the upper Midwest, recently expanded to Colorado by acquiring the largest bank in that state and wants to push its franchise even further. Odds on such transaction are also put at one in three.

A combination of two Detroit-based banks - Comerica Inc. and Michigan National Corp. - was seen as one of the more likely weddings.

A contrarian view came from Mr. DeSantis. Pointing out that Michigan National fought off an unsolicited bid from Comerica a few years ago, he said that remaining "bad blood" reduces the chances to 5%. [Tabular Data Omitted]

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