Magazine article American Banker

Mixed Feelings as Mellon Completes Dreyfus Takeover

Magazine article American Banker

Mixed Feelings as Mellon Completes Dreyfus Takeover

Article excerpt

Dreyfus Corp. officially became part of Mellon Bank Corp. Wednesday, following votes by shareholders of both organizations to approve the pairing.

The merger', valued at $1.9 billion, makes Mellon by far the largest bank manager of mutual funds, with $70 billion under management.

It was finalized with the stock market's last bell, when shares of Dreyfus were converted into stock of the Pittsburgh banking company.

Frank V. Cahouet, chairman of $37 billion-asset Mellon, said the merger paved the way for Mellon to "be a leader in serving virtually all segments of the investing public."

The bank's aggressive move into investment management "is a powerful reflection of our evolution into a diversified financial services company with a bank at its core," he said.

Mellon and Dreyfus obtained the last necessary approvals for the long-pending merger at shareholder meetings Tuesday. Separate votes were taken in Pittsburgh, Mellon's home base, and in New York, where Dreyfus has its headquarters.

The Dreyfus meeting was sparsely attended, with the company's 11 directors outnumbering the public shareholders on hand.

Dreyfus chairman Howard Stein called the merger "the dawning of a new era."

"This will become apparent with the programs that result," he said.

But other Dreyfus employees said privately that the meeting signified the end of an era at the company, which has operated independently since its inception 40 years ago.

"It's a sad, sad day," said one employee, who asked not to be identified. …

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