Saturday, April 08, 2006

More to read J P Morgan and Bank of New York

After weeks of speculation, J.P. Morgan Chase & Co. secured a deal to acquire Bank of New York Co.'s retail-banking business.

As expected, the deal will involve a swap of assets, not an outright purchase. J.P. Morgan, the nation's third-largest bank by market value, announced Saturday that it will give Bank of New York its corporate-trust unit and a cash payment of $150 million in exchange for the retail-banking business. (Read statements from the companies.)

The Bank of New York said it will retain and continue to build its private-banking business, which involves the management of more than $60 billion in assets for high net-worth clients.

The $150 million cash payment reflects the different valuations of the two business lines that are being exchanged. Bank of New York's retail-banking unit, which is comprised of consumer, small-business and middle-market banking operations, is valued at $2.3 billion, the companies said. J.P. Morgan's trust unit, which provides record-keeping and other back-office services for institutional holders of bonds and other securities, is valued at $2.15 billion. The companies expect the deal to close in the second half of 2006