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
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
Within hours, NationsBank announced that Huntington Bancshares
Inc. of Columbus, Ohio, would buy about 10 percent of Barnett's
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
The transaction is the largest bank divestiture in a single
state and the second-largest in history, the Justice Department
"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. …