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: Bank One Corporation
Subject Company: Bank One Corporation
Exchange Act File Number of Subject Company: 001-15323
J. P. MORGAN CHASE & CO. AND BANK ONE CORPORATION TO MERGE
- STRATEGIC BUSINESS COMBINATION DESIGNED TO CREATE SHAREHOLDER VALUE THROUGH
BALANCED BUSINESS MIX, GREATER SCALE, ENHANCED COMPETITIVENESS -
- JPMORGAN CHASE'S WILLIAM B. HARRISON WILL BE CHAIRMAN AND CHIEF EXECUTIVE
OFFICER; BANK ONE'S JAMES DIMON WILL BE PRESIDENT AND CHIEF OPERATING OFFICER -
- COMBINED COMPANY WILL BE A LEADING GLOBAL FINANCIAL SERVICES ENTERPRISE, WITH
TOP-TIER POSITIONS IN CONSUMER BANKING, INVESTMENT BANKING, AND OTHER KEY
BUSINESS SEGMENTS -
- CORPORATION TO BE HEADQUARTERED IN NEW YORK; RETAIL FINANCIAL SERVICES
BUSINESS TO BE HEADQUARTERED IN CHICAGO -
NEW YORK and CHICAGO, January 14, 2004 - J. P. Morgan Chase & Co. (NYSE: JPM)
and Bank One Corporation (NYSE: ONE) today announced that they have agreed to
merge in a strategic business combination establishing the second largest
banking franchise in the United States, based on core deposits. The combined
company will have assets of $1.1 trillion, a strong capital base, 2,300 branches
in seventeen states and top-tier positions in retail banking and lending, credit
cards, investment banking, asset management, private banking, treasury and
securities services, middle-market, and private equity. With balanced earnings
contributions from retail and wholesale banking, the combined company will be
well-positioned to achieve strong and stable financial performance and increase
shareholder value through its balanced business mix, greater scale, and enhanced
efficiencies and competitiveness.
The agreement, which has been unanimously approved by the boards of directors of
both companies, provides for a stock-for-stock merger in which 1.32 shares of
JPMorgan Chase common stock will be exchanged, on a tax-free basis, for each
share of Bank One common stock. Based on JPMorgan Chase's closing price of
$39.22 on Wednesday, January 14, 2004, the transaction would have a value of
approximately $51.77 for each share of Bank One common stock, and would create
an enterprise with a combined market capitalization of approximately $130
billion. The premium, based upon the average closing stock prices of JPMorgan
Chase and Bank One for the previous month, would be approximately 8 percent and
would be approximately 14 percent based on today's closing prices.
Under the agreement, the combined company will be headed by William B. Harrison,
60, as Chairman and Chief Executive Officer, and by James Dimon, 47, as
President and Chief Operating Officer, with Mr. Dimon to succeed Mr. Harrison as
CEO in 2006 and Mr. Harrison continuing to serve as Chairman. The company's
sixteen-member Board of Directors will have fourteen outside directors, seven
each from JPMorgan Chase and Bank One, plus Messrs. Harrison and Dimon.
The combined company's senior management team will also include an Office of the
Chairman, composed of Messrs. Harrison and Dimon; Donald H. Layton, Vice
Chairman (Finance, Risk & Technology); and David A. Coulter, Vice Chairman
(Investment Banking and Investment Management & Private Banking).
Other senior executives of the combined company, who will serve on the firm's
Executive Committee, and their areas of responsibility include: Austin Adams,
Technology; Linda Bammann, Risk - Deputy; Steven D. Black, Equities; James S.
Boshart III, Middle Market; William Campbell, Card Chairman; David E. Donovan,
Retail Branches; Dina Dublon, Finance; Ina R. Drew, Treasury; John J. Farrell,
Human Resources; Walter A. Gubert, Investment Banking, Europe, Middle East and
Africa; Joan Guggenheimer, Legal; James B. Lee, Investment Banking; Jay
Mandelbaum, Strategy; William H. McDavid, Legal; Heidi Miller, Treasury and
Security Services; Stephen J. Rotella, Mortgage; John W. Schmidlin, Technology;
Charles W. Scharf, Retail Banking and Lending; Richard J. Srednicki, Card CEO;
James E. Staley, Investment Management & Private Bank; Jeffrey C. Walker,
Private Equity; Don M. Wilson III, Risk; and William T. Winters, Credit & Rates.
The merged company will be known as J. P. Morgan Chase & Co. It will continue to
trade on the New York Stock Exchange, under the symbol JPM. Its corporate
headquarters will be located in New York. The retail financial services
business, which includes the consumer banking, small business banking, and
consumer lending activities with the exception of credit card, will be
headquartered in Chicago. Chicago will also serve as the headquarters for the
middle market business.
The JPMorgan brand will continue to be used for the wholesale business. Bank One
and Chase are both strong, respected retail brands. The combined company will
continue to use both brands in their respective markets and products, while
research is conducted to determine a long-term retail brand strategy.
It is expected that cost savings of $2.2 billion (pre-tax) will be achieved over
a three-year period. The combined enterprise will have excess capital, and is
expected to continue to generate significant free cash flow. Giving pro forma
effect to anticipated cost savings and stock repurchases, the transaction is
expected to be accretive to 2005 GAAP and cash earnings per share.
Merger-related costs are expected to be $3 billion (pre-tax).
Under the merger agreement, and subject to Bank One board approval, Bank One
expects to declare an increase in its quarterly dividend to $0.45 per share.
William B. Harrison, Chairman and Chief Executive Officer of JPMorgan Chase,
said: "This landmark transaction will create one of the world's great financial
services companies--a powerful enterprise well-positioned to generate
significant value for our shareholders, customers and communities. We will have
a trillion-dollar-plus asset base; one of the broadest and deepest product mixes
globally; and a dynamic, talented management team. In addition, with our balance
of consumer and wholesale business, the combined company will achieve greater
earnings consistency. My colleagues and I look forward to working with Jamie
Dimon and his colleagues to bring the unique benefits of this merger to all of
our constituencies."
James Dimon, Chairman and Chief Executive Officer of Bank One, said: "The merger
of Bank One and JPMorgan Chase makes tremendous sense strategically,
operationally and financially. I've known Bill Harrison for many years, and have
tremendous respect for him personally and professionally. Together, we have a
strong management team that can compete with the best. We will be a major
provider of both consumer and commercial banking services in the United States
and a leader in investment banking and wealth management globally, with a strong
balance sheet and an intense focus on performance and execution. Our retail and
wholesale businesses and our geographies complement each other, and our
respective earnings contributions provide near-perfect balance. We are also
excited about the opportunities we will have to continue to build our strong
franchise in the Midwest, with Chicago as a vibrant financial center. Our
combined company will have the size, scale, product mix, customer base,
distribution channels, and earnings stability to achieve outstanding results,
and enhanced shareholder value for many years to come."
Reflecting the determination of both companies to serve their communities and to
maintain the highest possible Community Reinvestment Act ratings, the combined
company will expand upon JPMorgan Chase's and Bank One's historic commitment to
community development and philanthropy by selecting the best practices and
programs from each firm. All of the communities served by the two institutions
will benefit from the combined company's continuing dedication to cutting-edge
community development products, innovative philanthropic programs, and its
partnerships with communities.
The merger is subject to the approval of the shareholders of both institutions
as well as U.S. federal and state and foreign regulatory authorities. Completion
of the transaction is expected to occur in mid-2004.
J. P. Morgan Chase & Co.'s financial advisor on the transaction was JPMorgan
Securities Inc.; and its legal advisor was Simpson Thacher & Bartlett LLP. Bank
One's financial advisor on the transaction was Lazard Freres & Co., LLC and its
legal advisor was Wachtell, Lipton, Rosen & Katz.
JPMorgan Chase is a leading global financial services firm with assets of $793
billion and operations in more than 50 countries. The firm is a leader in
investment banking, financial services for consumers and businesses, financial
transaction processing, investment management, private banking and private
equity. A component of the Dow Jones Industrial Average, JPMorgan Chase is
headquartered in New York and serves more than 30 million consumer customers
nationwide, and many of the world's most prominent corporate, institutional and
government clients. Information about JPMorgan Chase is available on the
internet at www.jpmorganchase.com.
Bank One is the nation's sixth-largest bank holding company, with assets of $290
billion. Bank One currently has more than 51 million credit cards issued, and
serves nearly 7 million retail households and more than 20,000 middle market
customers. It also manages $175 billion of clients' investment assets. Bank One
can be found on the Internet at www.bankone.com.
INVESTMENT COMMUNITY MEETING TOMORROW (THURSDAY) MORNING, 8:00 A.M. EST, 7:00
A.M. CST
JPMorgan Chase and Bank One will hold a meeting for the investment community
tomorrow (Thursday) morning at 8:00 a.m. EST (7:00 a.m. CST), at The Equitable
Center Auditorium, located at 787 Seventh Avenue, between 51st and 52nd Streets
in New York City. To attend, please arrive at least fifteen minutes prior to
start time to allow for registration. The presentation will also be made
available live via webcast through the www.jpmorganchase.com and www.bankone.com
websites, and via telephone on a first-come, first-served basis at
1-800-478-6251 for domestic callers. Those dialing in from overseas are asked to
dial 913-981-5558. Please access the webcast or phone lines at least fifteen
minutes prior to start time.
A replay of the morning meeting will be made available from 11:00 a.m. EST
Thursday until 12:00 noon EST on March 31. The replay can be accessed by webcast
through the www.jpmorganchase.com and www.bankone.com websites or by dialing
1-888-203-1112 for domestic participants, 719-457-0820 for international
participants. Callers for the replay should enter confirmation code 612766 for
access.
JP MORGAN CHASE/BANK ONE: THE MERGER AT A GLANCE
-------------------------------------------------
Two Great Banking Companies
---------------------------
JP Morgan Chase (as of 9/30/03) Bank One (as of 9/30/03)
- 92,900 employees - 71,200 employees
- 3rd largest bank holding company - 6th largest bank holding company in
in U.S. in U.S.
- $793 billion assets - $290 billion assets
- Operations in virtually every state - 1,800 branches in 14 states
and more than 50 countries
When Combined, Top Positions Across the Full Spectrum of Wholesale and Retail
Financial Services
--------------------------------------------------------------------------------
Retail Banking Investment Treasury & Investment Private Equity
Banking Securities Management &
Services Private Banking
--------------------------------------------------------------------------------------------------
BRANCH BANKING #1 Global #1 U.S. Dollar #1 U.S./#3 Global One of the
-------------- Syndicated Loans Clearing Private Bank largest private
#4 Branch equity players
Network #1 Derivatives #1 U.S. Corporate #2 U.S. Active
House Trustee Asset Manager
#2 Core Deposits
#2 U.S. Investment #1 Securities #2 Global Money
RETAIL LENDING Grade Corporate Lending Market Asset
-------------- Debt Manager
#2 Credit Card
#4 Global Equity & #1 CHIPS, #4 U.S. Mutual
#2 Middle Market Equity-Related Fedwire, ACH Fund Company
Origination
#1 Auto (Non #5 Global
Captive) Announced M&A
#4 Mortgage
#2 Home Equity
Second Largest Banking Company in the U.S. (as of 9/30/03, in $millions)
------------------------------------------------------------------------
JP Morgan Bank One Combined
Chase
Loans $ 236,201 $ 141,710 $ 377,911
Assets 792,700 290,006 1,082,706
Managed Assets 827,015 326,769 1,153,784
Deposits $ 313,626 $ 163,411 $ 477,037
Total Liabilities 747,743 267,595 1,015,338
Total Equity 44,957 22,411 67,368
A Broad and Balanced Business Mix(1)
- Consumer Banking & Lending,
Mortgage, Auto, Small
Business & Middle Market 33%
- Card Services 16%
- Investment Banking 39%
- Treasury & Securities Services 7%
- Investment Management &
Private Banking 5%
Extensive Branch Network
Northeast Midwest Southwest
New York #1 Illinois #1 Texas #1
Connecticut #8 Indiana #1 Arizona #1
New Jersey #12 Michigan #3 Louisiana #2
Ohio #4 Utah #3
Wisconsin #4 Colorado #5
W. Virginia #4 Oklahoma #6
Kentucky #4
______________________
1 Based on combined pre-tax income as of 9/30/03, excluding corporate and
private equity results.
This news release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements include, but
are not limited to, statements about the benefits of the merger between JPMorgan
Chase and Bank One, including future financial and operating results, JPMorgan
Chase's plans, objectives, expectations and intentions and other statements that
are not historical facts. Such statements are based upon the current beliefs and
expectations of Bank One's and JPMorgan Chase's management and are subject to
significant risks and uncertainties. Actual results may differ from those set
forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ from
those set forth in the forward-looking statements: the ability to obtain
governmental approvals of the merger on the proposed terms and schedule; the
failure of JPMorgan Chase and Bank One stockholders to approve the merger; the
risk that the businesses will not be integrated successfully; the risk that the
cost savings and any revenue synergies from the merger may not be fully realized
or may take longer to realize than expected; disruption from the merger making
it more difficult to maintain relationships with clients, employees or
suppliers; increased competition and its effect on pricing, spending,
third-party relationships and revenues; the risk of new and changing regulation
in the U.S. and internationally. Additional factors that could cause JPMorgan
Chase's and Bank One's results to differ materially from those described in the
forward-looking statements can be
found in the 2002 Annual Reports on Forms 10-K of JPMorgan Chase and Bank One,
and in the Quarterly Reports on Form 10-Q of JPMorgan Chase and Bank One, filed
with the Securities and Exchange Commission and available at the Securities and
Exchange Commission's internet site (http://www.sec.gov).
Stockholders are urged to read the joint proxy statement/prospectus regarding
the proposed transaction when it becomes available, because it will contain
important information. Stockholders will be able to obtain a free copy of the
joint proxy statement/prospectus, as well as other filings containing
information about J. P. Morgan Chase & Co. and Bank One, without charge, at the
Securities and Exchange Commission's internet site (http://www.sec.gov). Copies
of the joint proxy statement/prospectus and the filings with the Securities and
Exchange Commission that will be incorporated by reference in the joint proxy
statement/prospectus can also be obtained, without charge, by directing a
request to J. P. Morgan Chase & Co., 270 Park Avenue, New York, NY 10017,
Attention: Office of the Secretary, 212-270-6000, or to Bank One Corporation, 1
Bank One Plaza, IL1-0738, Chicago, IL 60670, Attention: Investor Relations,
312-336-3013. The respective directors and executive officers of JPMorgan Chase
and Bank One and other persons may be deemed to be participants in the
solicitation of proxies in respect of the proposed merger. Information regarding
JPMorgan Chase's directors and executive officers is available in its proxy
statement filed with the Securities and Exchange Commission by JPMorgan Chase on
March 28, 2003, and information regarding Bank One's directors and executive
officers is available in its proxy statement filed with the Securities and
Exchange Commission by Bank One on March 5, 2003. Other information regarding
the participants in the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, will be contained the
joint proxy statement/prospectus and other relevant materials to be filed with
the Securities and Exchange Commission when they become available.
Media contacts
JPMorgan Chase: Joseph Evangelisti, 212-270-7438
Bank One: Thomas A. Kelly, 312-732-7007
Investor contacts
JPMorgan Chase: Ann Borowiec, 212-270-7318
Bank One: Amy R. Fahey, 312-732-5771