Barnett Deal Passes 2 Tests Merger to Get Federal Reserve Scrutiny Today

By Barker-Benfield, Simon | The Florida Times Union, December 10, 1997 | Go to article overview

Barnett Deal Passes 2 Tests Merger to Get Federal Reserve Scrutiny Today


Barker-Benfield, Simon, The Florida Times Union


The NationsBank/Barnett merger cleared two key regulatory

hurdles yesterday, and the last one is expected today from the

Federal Reserve.

In a series of carefully choreographed moves yesterday, the

U.S. Department of Justice and the Florida attorney general both

signed off on NationsBank buying Jacksonville-based Barnett

Banks Inc. The decision came after NationsBank agreed to sell

$4.1 billion in deposits, about $1 billion more than originally

planned.

Within hours, NationsBank announced that Huntington Bancshares

Inc. of Columbus, Ohio, would buy about 10 percent of Barnett's

600 branches.

The Board of Governors of the U.S. Federal Reserve will

consider the merger, the second-largest in U.S. history, in a

private meeting today in Washington.

As part of yesterday's deal, NationsBank agreed with Florida

Attorney General Bob Butterworth to sell 127 branch offices and

agreed with the Department of Justice to sell 124 branches in

order to meet anti-trust guidelines.

The guidelines apply where the merger of the two banks leaves

communities without adequate banking competition.

Selling branches also helps with the goal of raising money and

cutting $915 million in expenses to pay for the merger, which

the banking giant has promised Wall Street.

In addition to the anti-trust sales, NationsBank expects to

close branches in other markets where both banks operate. The

bank has not estimated how many jobs will be cut or how many

branches will remain after the merger.

Analysts expect the combined banks to shed 5,000 or more jobs.

NationsBank agreed to the $4.1 billion deposit sale even though

the amount was $1.1 billion more than the Charlotte, N.C.-based

bank proposed in its merger plan, said Assistant U.S. Attorney

General Joel T. Klein.

"We wanted half a billion more in the Tampa Bay area alone,"

said Trish Conners, head of the anti-trust section of the

Florida Attorney General's Office. "Tampa was always the

battleground."

The transaction is the largest bank divestiture in a single

state and the second-largest in history, the Justice Department

said.

"With this historic divestiture, the citizens of Florida will

continue to reap the benefits of competition," said Klein, head

of Justice's antitrust division. "This pro-competitive result

should help to assure that Floridians will receive the lowest

rates on loans and the best service for their banking needs."

The Florida Attorney General's Office and Comptroller's Office

worked with Justice on the agreement.

Under terms sought by state officials, all tellers with both

banks who work at a satisfactory level in branches to be bought

by NationsBank will be offered a job after the merger.

Fired employees will have access to a bankwide job-posting

system and receive priority placement consideration. …

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Barnett Deal Passes 2 Tests Merger to Get Federal Reserve Scrutiny Today
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