Bank of New York, the oldest bank in the U.S., and Mellon Financial Corporation said December 4 that they will merge, forming a powerful global firm that will diversify their businesses both geographically and by revenue sector.
The new firm, named Bank of New York Mellon Corporation, will be New York-based and will rank number one in clearing services, issuer services, and as a global custodian, with $16 trillion in assets under custody. The combined company will have more than $1 trillion in assets under management, making it one of the top five asset managers in the U.S and one of the top 10 globally, according to a presentation to press and analysts.
Bank of New York’s current chairman, CEO, and president, Thomas Renyi, will become executive chairman of the merged company, “for 18 months following the close of the transaction,” which is expected in July 2007, and will be responsible for integrating the two companies. Mellon Financial Corporation’s current chairman, CEO, and president, Robert Kelly, will become CEO of the merged company and then succeed Renyi as board chairman. The current president of Bank of New York, Gerald Hassell, will continue in that capacity in the new company.
The new holding company will have a relative ownership of 63% Bank of New York, 37% Mellon. It will have 18 directors, including 10 from Bank of New York and eight from Mellon. Each Bank of New York shareholder will receive 0.9434 shares of stock in the new holding company for each of its Bank of New York shares; each Mellon shareholder gets one share of the new entity’s stock for each Mellon share held. The merged company will pay a quarterly dividend of $0.235 per share.