Four top US corporate firms based in New York drove the legal work behind the merger of US banks Chemical Banking Corporation and the Chase Manhattan Corporation.
The new institution, adopting the Chase name, will be the largest bank in the US, with nearly $300 billion in assets and $20 billion in shareholders' equity.
Chase was advised by corporate firm Milbank Tweed Hadley & McCloy, with a team led by mergers and acquisitions partner Albert Lilley and employment benefits partner Fred Kneip. Chase also hired Sullivan & Cromwell because of its expertise in mergers and acquisitions.
Frank Logan, Milbank managing partner, said the deal was the latest example of a trend for bank consolidation, both in the US and globally.
“We have seen increasing numbers of them in the US because we have so many banks here. It's an accelerating trend,” he said.
Simpson Thatcher & Bartlett acted for Chemical Banking Corporation. Skadden Arps Slate Meagher & Flom represented both banks to carry out anti-trust work, an activity which characterises many big US deals.
In-house general counsel – Edward Shaw for Chase Manhattan and Will McDavid for Chemical Bank – played key roles in the deal, said Logan.
The new Chase will continue to use a number of law firms globally and no decision to restructure its legal panel has yet been taken.
The newly-merged firms will have 25 million customers across the US. It will be the number one bank in the US corporate sector and will take a leading role in global finance.
While the merger creates scale, it will also create yearly cost savings of $1.5 billion – 16 per cent of its operating expenses. Around 12,000 jobs from a total of 75,000 in 51 countries will be “eliminated”, said the new bank.
Describing the merger as a “unique strategic fit”, Chemical's chair and chief executive officer Walter Shipley said: “We are seizing upon an unparalleled opportunity to create a premier global financial services company.”