by Mike Bevel, CollectionIndustry.com
The holidays came early, as it were, for institutional investors after the announcement that Bank of New York Co. agreed to buy Mellon Financial Corp. for about $16.5 billion.
Bank of New York had tried this venture about ten years ago when, in 1998, it offered to pay $23 billion for Mellon Bank Corp. However, that bid was rebuffed by Mellon in the form of then-chairman Frank Cahouet. It took the leaving of Cahouet and the arrival of Robert Kelly, the 52-year-old chairman and chief executive officer of Mellon, to bring about this mighty merger.
The combined company will safeguard $16.6 trillion for institutions, topping JPMorgan Chase & Co. as the world’s largest custody bank. It will manage $1.1 trillion in invested assets and have revenue of about $12 billion a year, the companies said today in a statement.
The companies said they will cut pretax costs by about $700 million a year, or about 8.5 percent of their combined total, in part by shedding about 3,900 of their 40,000 employees over three years. Restructuring charges will be about $1.3 billion, they said in the statement.
