Subject category:
Strategy and General Management
Published by:
IBS Case Development Center
Length: 13 pages
Data source: Published sources
Topics:
Bank One and JP Morgan merger; Mergers & acquisitions (M&A); Growth strategies; American banking industry; Commercial and investment banking; William B Harrison; Private equity and banking; Glass-Steagall Act 1933; Gramm-Leach-Bliley (GLB) Act; Critical mass; Value creation; Credit card business; JP Morgan Chase and Co; Consolidation of technology platforms; Alliances and joint ventures
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Abstract
Deregulation of the banking industry in the US brought in a wave of consolidations, creating some of the largest banks in the world. On 14 January 2004, JP Morgan Chase announced its merger with Bank One, a deal, which was valued at $58 billion. The merger created the second largest bank in the US with assets worth $1.1 trillion. The combined company, JP Morgan Chase and Co, had a balanced mix of consumer and wholesale business, synergies in retail banking as well as investment banking, consistency in earnings and increased customer base. The success of the merger depended on the ability of the companies to blend their cultures, achieve cost cuts and attain growth in revenues. The case helps to discuss the consolidations in the banking industry due to deregulation, and the pros and cons of mergers in the industry.
About
Abstract
Deregulation of the banking industry in the US brought in a wave of consolidations, creating some of the largest banks in the world. On 14 January 2004, JP Morgan Chase announced its merger with Bank One, a deal, which was valued at $58 billion. The merger created the second largest bank in the US with assets worth $1.1 trillion. The combined company, JP Morgan Chase and Co, had a balanced mix of consumer and wholesale business, synergies in retail banking as well as investment banking, consistency in earnings and increased customer base. The success of the merger depended on the ability of the companies to blend their cultures, achieve cost cuts and attain growth in revenues. The case helps to discuss the consolidations in the banking industry due to deregulation, and the pros and cons of mergers in the industry.