The merger between bankboston Corp. and Fleet Financial Group will create another regional powerhouse in the nation's banking industry - and may foreshadow a new wave of consolidation among top financial institutions.
The deal, which forms the nation's eighth-largest bank, follows a wave of blockbuster bank mergers that rocked the financial sector last year.
The merger of New England's two largest banks, both headquartered in Boston, establishes a new, stronger player in national and international banking. The $16 billion stock deal was announced Sunday.
The new company, to be known as Fleet Boston Corp., will have $180 billion in assets and 20 million customers, but some 4,500 employees could lose their jobs. It will be the third-largest US commercial lender, strong in debt and equity underwriting, cash management, and foreign-trade services.
"This transaction is driven by and meets our strategic objectives of achieving the requisite size and scope to compete effectively in our industry, while improving and diversifying the range of business lines we have to serve our customers," said Fleet's chairman and chief executive Terrence Murray.
Chad Gifford, BankBoston's chairman and chief executive, said the oldest US commercial bank decided to join with Fleet to become a Boston-based financial-service powerhouse and global leader in the new millennium.
Last year, several leading US banks forged megamergers in the face of industry overcapacity, hoping to cut costs and expand revenues, assets, and geographic reach, as well as tap new distribution channels.
Citicorp and Travelers Group Inc. last April struck one of the biggest corporate merger deals in history, worth more than $70 billion, to form Citigroup. Soon after, BankAmerica Corp. merged with NationsBank Corp. in a deal worth about $60 billion, and First Chicago NBD Corp. signed a $30 billion pact with BancOne Corp.