1. Introduction The combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock. (referenca 1) Mergers are a common practice in the business world because they enable increased efficiency and market share. 2. History 2. 1. JP Morgan&Co. J. P. Morgan & Co. , was founded in New York in 1871 as Drexel, Morgan & Co. by J. Pierpont Morgan and Philadelphia banker Anthony Drexel. The firm made its first big splash in 1879 when it sold financier William Vanderbilt’s New York Central Railroad stock without driving down the share price.
(referenca 4) During the late 19th century and early 20th century J. P. Morgan & Co. financed a lot of engineering and innovative projects. Some examples funded by it are the Brooklyn Bridge and the Panama Canal construction. Besides these projects it was also present at the birth of aviation, providing banking services to the pioneering Wright brothers from the early years through their invention of the world’s first successful airplane. (referenca 4)During the years of World War I r, J. P. Morgan & Co. aided the British and French, arranging a $500 million loan r, J. P. Morgan & Co. aided the British and French, arranging a $500 million loan.
In 1959 Morgan merged with Guaranty Trust Co. (commercial and investment banking) to create Morgan Guaranty Trust Co. of New York, later forming a holding company that restored the famous J. P. Morgan & Co. name. (referenca 4) 2. 2. Chase Manhattan Bank Chase Manhattan Bank was formed in the year 1955 with the merger of Chase National Bank and the Bank of the Manhattan Company. (referenca 2) In the 1970s, Chase added nearly 40 new branches, representative offices, affiliates, subsidiaries and joint ventures outside the United States.
In 1973 Chase opened a representative office in Moscow, which was the first presence for a U. S. bank in the Soviet Union since the 1920s. It also became the first U. S. correspondent to the Bank of China since Chinese Revolution . (referenca 4) During the 1970s and 1980s the Chase Manhattan Bank was led by David Rockefeller, and it emerged as one of the largest and most prestigious banking concerns. It had leadership positions in syndicated lending, treasury and securities services, credit cards, mortgages, and retail financial services.
(referenca3) The Chase Money Card was the first Visa debit card offered by a bank in New York. In 1985 Spectrum was launched, which is an electronic home banking service that not only permitted banking transactions but also allowed customers to buy and sell stocks through a discount broker affiliated with Chase. (referenca 4) Chase Manhattan Bank is the product of two megadeals that came earlier, its mergers with Manufacturers Hanover and Chemical. In 1991, Manufacturers Hanover Corp. merged with Chemical Banking Corp. , under the name of Chemical Banking Corp.
, then the second-largest banking institution in the United States. (referenca5) Then in 1996 Thomas G. Labrecque merged the Chase Manhattan Bank with the Chemical Banking Corp. (referenca2) This merger created the largest bank holding company in the United States at that time, and it was prior to the merger with JP Morgan&Co. 3. JP&Morgan Chase & Co. On December 31 of year 2000 the two banks J. P. Morgan &Co. and Chase Manhattan Bank united to create the name of J. P. Morgan Chase & Co. keeping two of the most established names in U. S. banking.
This merger created a financial services powerhouse and became a strong rival of firms such are Merrill Lynch, Goldman Sachs and Morgan Stanley Dean Witter. (refernca 6) Before the merger the CEO of the Chase Manhattan Bank was William Harrison, and of the J. P. Morgan & Co. was Douglas Warner. After the creation of the combined company, J. P. Morgan Chase & Co. the Chief Executive and president was assigned William Harrison while Douglas Warner was retained as a chairman. (referenca 7) The merger was approved by the Federal Reserve Board on December 11 and by the New York Banking Board on December 14, 2000.
(referenca 8) In 1999, the two banks combined had net income of approximately $7. 5 billion and revenue of approximately $31 billion. With the settlement of the deal, valued $36 billion, it acquired $660 billion of assets. (referenca 6) Under the deal J. P. Morgan stockholders received 3. 7 shares of Chase. The newly created company is a financial holding company, a global financial services firm and a banking institution in the United States of America. It operates worldwide, in more than 60 countries to provide corporate banking solutions to clients.
(referenca 3) It is engaged in different kinds of activities such are in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management and private equity. (referenca 9)
After the merger of the year 2000 came more mergers and acquisitions of the Company with other institutions that would shape it to its final form. Below are listed some of the most important ones: * In 2004, Bank One Corp. merged with J. P. Morgan Chase & Co. , keeping the name JPMorgan Chase & Co. by uniting the investment and commercial banking skills of J. P. Morgan Chase with the consumer banking strengths of Bank One. (referenca 5)
* In 2008, J. P. Morgan Chase & Co. acquired The Bear Stearns Companies Inc. , strengthening its capabilities across a broad range of businesses, including prime brokerage, cash clearing and energy trading globally. (referenca 4) * In 2008, J. P. Morgan Chase & Co. paid $1. 9 billion to the F. D. I. C. to acquire all of WaMu’s assets, branches and deposits. With WaMu, J. P. Morgan had $905 billion in deposits and 5,400 branches nationwide, rivaling Bank of America in size and reach. (referenca 9) The major businesses of the J. P. Morgan are:
* Investment Banking- The firm serves 8,000 clients in more than 60 countries. Clients include corporations, financial institutions, governments and institutional investors. (referenca 10) It offers a full range of investment banking products and services in all major capital markets. * Card Services- The company has 94 million cards in circulation and $135 billion in managed loans. (referenca 10) They are distributed and designed to satisfy the needs individual consumers, small businesses and partner companies. * Retail Financial Services-It is formed to help consumers and businesses with their financial needs.
This sector includes consumer banking, small business banking, auto, education, insurance and home finance. * Commercial Banking-Serves its clients with activities like lending, treasury services, investment banking and asset management. (referenca 5) * Treasury & Securities Services- Is one of the largest cash management providers in the world to support the CFOs, treasurers, issuers and investors. (referenca 10) * Asset Management- A global leader in managing investments and wealth for its clients. References: 1. http://www. investopedia. com/terms/m/merger. asp#axzz2IEmsQoNR
2. http://www.nndb. com/company/684/000052528/ 3. http://en. wikipedia. org/wiki/JPMorgan_Chase#Controversies 4. http://www. jpmorganchase. com/corporate/About-JPMC/document/shorthistory. pdf 5. http://www. jpmorganchase. com/corporate/About-JPMC/jpmorgan-history. htm 6. http://www. forbes. com/2000/10/18/1016topdeals_2.
html 7. http://cnnfn. cnn. com/2000/09/13/deals/chase_morgan/ 8. http://www. innercitypress. org/jpmcmb1. html 9. http://topics. nytimes. com/top/news/business/companies/morgan_j_p_chase_and_company/index. html? offset=10&s=newest 10. http://www. marketswiki. com/mwiki/JPMorgan_Chase_%26_Co.