FleetBoston - Press Release
Filing pursuant to Rule 425 under the
Securities Act of 1933, as amended and
Deemed filed under Rule 14a-12 under the
Securities Exchange Act of 1934, as amended
Filer: FleetBoston Financial Corporation
Subject Company: FleetBoston Financial Corporation
Commission File Number: 1-6366
On October 27, 2003, FleetBoston Financial Corporation, a Rhode Island
corporation, and Bank of America Corporation, a Delaware corporation, issued the
following joint press release:
Investors may contact: Media may contact:
AT BANK OF AMERICA AT BANK OF AMERICA
Kevin Stitt, 704.386.5667 Eloise Hale 704.387.0013
Lee McEntire, 704.388.6780
AT FLEETBOSTON FINANCIAL AT FLEETBOSTON FINANCIAL
John Kahwaty 617.434.3650 James Mahoney 617.434.9552
BANK OF AMERICA AND FLEETBOSTON FINANCIAL TO CREATE
NATION'S PREMIER FINANCIAL SERVICES COMPANY
Bank of America Corporation and FleetBoston Financial Corporation today
announced a definitive agreement to merge, creating the nation's premier
financial services company. The company will bring unmatched convenience,
innovation and resources to customers and clients throughout the nation and
around the world.
The merger, to be accomplished through a stock-for-stock transaction,
establishes a new Bank of America that will serve approximately 33 million
consumer relationships, with leading market shares throughout the Northeast,
Southeast, Midwest, Southwest and West regions of the United States.
The company will provide market-leading products for 2.5 million business
clients in the United States and 34 other countries, backed by the capital power
of the second largest banking company in the world. The new Bank of America will
have $68 billion in shareholders' equity and the two companies have generated
$10 billion in earnings in the first nine months of 2003.
Charles K. Gifford, currently chairman and chief executive officer of
FleetBoston, will be chairman of the board of directors of the merged company
from Boston. Kenneth D. Lewis, currently chairman and chief executive officer of
Bank of America, will be chief executive officer and will maintain his principal
office in the combined company's headquarters in Charlotte.
"This merger is about delivering the combined capabilities of two powerful
organizations to our customers, shareholders and communities," Lewis said.
"Customers will benefit from the most extensive retail franchise in the nation,
a shared commitment to service excellence, and a full range of traditional and
innovative financial products and services. Shareholders will benefit from the
best retail and wealth markets in America, unmatched diversity of revenues and
resources, and the most talented management team in the industry. Our
communities will benefit from our shared tradition of public-private
partnership, community development and philanthropic investment.
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"The opportunity to merge with Fleet is unique," Lewis continued. "From the Bank
of America perspective, we will have the leading market position in
Massachusetts, Rhode Island, Connecticut and New Jersey as well as a powerful
retail platform in New York City, upstate New York, New Hampshire and Maine.
From a broader perspective, we are building a company that will deliver more
financial service capabilities to more Americans than ever before in our
nation's history.
"We are proud to join forces in these new markets and will continue to be a
large employer and committed corporate citizen in New England, as we have in the
other regions of the country where we do business," Lewis continued. "In that
regard, wealth management, leasing, Latin America, asset-based lending, small
business and premier banking will be based in Boston.
"I am especially looking forward to working with Chad Gifford, for whom I have
had a high regard over the years. Chad's strategic thinking based on his years
of success and experience will be invaluable for me as we partner on customer,
employee, values, philanthropic and strategic issues."
"This combination will bring added convenience and resources to Fleet customers
throughout the Northeast," Gifford said. "We decided that Bank of America
provided the perfect complement to our franchise for our customers. We are also
impressed that they shared Fleet's commitment to philanthropy and community
development. Together, our companies should be the unchallenged leaders in these
endeavors within our industry."
Gifford continued, "While Fleet has established leading market shares in New
England and the Northeast, Bank of America has similar positions in the South,
West and Midwest. Together, these two companies will clearly be the number one
financial services provider for consumers and businesses of all sizes with
market-leading product and geographic capabilities."
STRONG MARKET POSITIONS IN ALL CUSTOMER SEGMENTS
The new Bank of America will be America's best banking franchise with unrivaled
retail distribution in the most attractive markets. The company will have 9.8
percent of the banking deposits in the United States and have the first, second
or third largest market shares in 21 of the 29 states in its retail footprint,
including significant market shares in 21 of the nation's 30 largest
metropolitan areas. Bank of America will be first, second or third in market
share in 23 of the 30 fastest growing metropolitan areas.
It will feature the most extensive and convenient delivery network through
almost 5,700 retail banking offices, more than 16,500 ATMs, award-winning online
and electronic bill pay services and 24-hour telephone banking.
In addition to being America's largest consumer bank, the new Bank of America
will be the number one lender to small banking businesses in the United States.
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It will serve 30 percent of the businesses operating in its 29-state franchise.
And it will have the largest share of middle market and large corporate
relationships, including more than 95 percent of the Fortune 500. The company
will be number one in providing domestic and global cash management services,
with 16,000 business and institutional clients. It also has a growing investment
bank that has been steadily gaining market share.
In wealth management, Bank of America will operate the largest private bank in
the United States and the third largest bank-owned brokerage. With $470 billion
in assets under management, the wealth management business will be the ninth
largest in the country. While the wealth management business will be based in
Boston, key leadership will be in both Boston and New York.
The company also will continue to implement quality and productivity programs
using Six Sigma tools and processes. Both Bank of America and FleetBoston
Financial have used Six Sigma successfully in recent years to streamline
processes, improve quality, efficiency and accuracy, and to free up capital for
strategic investment. The leadership team of the newly combined company is
committed to continuing the Six Sigma program in all areas of the business.
SUPERIOR CAPITAL STRENGTH
The company will feature superior capital strength and earnings diversity.
Today, it would be the fourth most profitable company in the world. About 56
percent of earnings will come from consumer and small business banking, about 25
percent from corporate banking, 11 percent from commercial banking and 8 percent
from wealth management.
THE MOST TALENTED LEADERSHIP TEAM IN THE INDUSTRY
A Risk and Capital Committee chaired by Lewis will be established to guide the
company's strategic direction. Its members, all of whom report to the CEO, will
include:
o Amy Woods Brinkley, chief risk executive
o Edward J. Brown III, president of Global Corporate and Investment Banking
o Barbara J. Desoer, president of Consumer Products
o James H. Hance Jr., vice chairman and chief financial officer
o Liam E. McGee, president of Consumer Banking
o Brian T. Moynihan, president of Wealth Management
o Eugene M. McQuade, president of the corporation, whose responsibilities
will also include Technology & Operations, Global Treasury Services,
Principal Investing, Latin America, management services and international
retail banking
o H. Jay Sarles, vice chairman and special adviser to the CEO
o R. Eugene Taylor, president of Commercial Banking
o Bradford H. Warner, president of Small Business and Premier Banking
The board of directors will have 19 members, including 12 from Bank of America
and 7 from FleetBoston Financial. It will meet three times a year in Boston and
five times in Charlotte.
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FINANCIAL TERMS AND OTHER INFORMATION
Under terms of the agreement, FleetBoston Financial stockholders will receive
..5553 shares of Bank of America common stock for each of their shares. The
exchange ratio was derived from the share price of Bank of America at the close
of business on October 22, 2003, to establish the transaction's value at almost
$47 billion, or $45 per FleetBoston Financial share.
The agreement has been approved by both boards of directors and is subject to
normal regulatory and shareholder approvals. Closing is expected in the first
half of 2004.
Bank of America was advised in the transaction by Banc of America Securities and
Goldman Sachs. FleetBoston Financial was advised by Morgan Stanley.
Bank of America is one of the world's largest financial institutions, serving
individual consumers, small businesses and large corporations and institutions
with a full range of banking, investing, asset management and other financial
and risk management products and services. The company provides unmatched
convenience for consumers in the United States, serving 1 in 3 American
households with 4,200 banking centers, more than 13,100 ATMs and an
award-winning Internet site with more than 7 million active online users. Bank
of America is rated the top Small Business Administration Lender in the United
States by the SBA. The company has offices in 150 countries and relationships
with 94 percent of U.S. Fortune 500 companies and 76 percent of the Global
Fortune 500. The 6th most profitable company in the United States, Bank of
America had $737 billion in assets, $409 billion in deposits and a market
capitalization of $116.2 billion at September 30, 2003. Bank of America
Corporation stock (ticker:BAC) is listed on the New York Stock Exchange.
www.bankofamerica.com
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FleetBoston Financial (NYSE & BSE: FBF), a diversified financial services
company with assets of $196 billion, offers a comprehensive array of financial
solutions to over 18 million individual, corporate, and institutional customers.
Products and services are available through a variety of channels including
1,460 stores and more than 3,400 ATMs from Maine to Pennsylvania, HomeLink(SM)
online banking, and telephone banking. Fleet is the leading small business and
commercial banking provider in the Northeast and a premier provider of financial
services to selected industries nationwide. Information about FleetBoston
Financial is available online at www.fleet.com.
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NOTE: SENIOR MANAGEMENT WILL PRESENT DETAILS OF THE MERGER AT 9:30 A.M. IN THE
JADE ROOM OF THE WALDORF ASTORIA HOTEL IN NEW YORK CITY. THE PRESENTATION CAN BE
ACCESSED VIA A WEBCAST AVAILABLE ON THE BANK OF AMERICA WEBSITE AT
HTTP://WWW.BANKOFAMERICA.COM/INVESTOR/. IT WILL ALSO BE WEBCAST IN THE INVESTOR
SECTION OF WWW.FLEET.COM.
SENIOR MANAGEMENT WILL MEET WITH THE NEWS MEDIA AT 11 A.M. IN THE SAME LOCATION.
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FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements, including statements
about the financial conditions, results of operations and earnings outlook of
Bank of America Corporation and FleetBoston Financial Corporation. The
forward-looking statements involve certain risks and uncertainties. Factors that
may cause actual results or earnings to differ materially from such
forward-looking statements include, among others, the following: 1) projected
business increases following process changes and other investments are lower
than expected; 2) competitive pressure among financial services companies
increases significantly; 3) general economic conditions are less favorable than
expected; 4) political conditions and related actions by the United States
military abroad may adversely affect the company's businesses and economic
conditions as a whole; 4) changes in the interest rate environment reduce
interest margins and impact funding sources; 5) changes in foreign exchange
rates increases exposure; 6) changes in market rates and prices may adversely
impact the value of financial products and assets; 7) legislation or regulatory
environments, requirements or changes adversely affect the businesses in which
the company is engaged; 8) litigation liabilities, including costs, expenses,
settlements and judgments, may adversely affect the company or its businesses;
and 9) decisions to downsize, sell or close units or otherwise change the
business mix of any of the company. For further information regarding either
company, please read the Bank of America and FleetBoston Financial reports filed
with the SEC and available at www.sec.gov.
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ADDITIONAL INFORMATION ABOUT THIS TRANSACTION
---------------------------------------------
Bank of America Corporation ("Bank of America") and FleetBoston Financial
Corporation ("FleetBoston") will file a Joint Proxy Statement/Prospectus and
other documents regarding this transaction with the Securities and Exchange
Commission ("SEC"). Bank of America and FleetBoston will mail the Joint Proxy
Statement/Prospectus to their respective stockholders. These documents will
contain important information about the transaction, and Bank of America and
FleetBoston urge you to read these documents when they become available.
You may obtain copies of all documents filed with the SEC regarding this
transaction, free of charge, at the SEC's website (www.sec.gov). You may also
obtain these documents, free of charge, from Bank of America's website
(www.bankofamerica.com) under the tab "About Bank of America" and then under the
heading "SEC Documents". You may also obtain these documents, free of charge,
from FleetBoston's website (www.fleet.com) under the tab "About Fleet" and then
under the heading "Investor Relations" and then under the item "SEC Documents"-
PARTICIPANTS IN THIS TRANSACTION
--------------------------------
Bank of America and FleetBoston and their respective directors and
executive officers may be deemed participants in the solicitation of proxies
from stockholders in connection with this transaction. Information about the
directors and executive officers of Bank of America and FleetBoston and
information about other persons who may be deemed participants in this
transaction will be included in the Joint Proxy Statement/Prospectus. You can
find information about Bank of America's executive officers and directors in
their definitive proxy statement filed with the SEC on March 27, 2003. You can
find information about FleetBoston's executive officers and directors in their
definitive proxy statement filed with the SEC on March 17, 2003. You can obtain
free copies of these documents from Bank of America and FleetBoston using the
contact information above.