Bank of New York, which agreed last month to acquire Mellon Financial in a $16.5 billion deal, reported Thursday that fourth-quarter net income that beat analysts' expectations.
Three of the four largest U.S. trust banks -- which manage money, hold securities and process trades for clients -- reported strong earnings on Wednesday, as demand rose for their asset management and servicing products.
Mellon said fourth-quarter profit rose 14% as demand for the money management and asset servicing company's fee-based businesses surged .
The combination of two storied names in American finance will create a powerhouse in custody services for institutional investors and one of the biggest asset managers.
Stocks closed sharply higher on a big day for corporate mergers, but investors may turn their attention back to the economy on Tuesday.
As we've reported --there’s been yet more consolidation in the banking sector. The big deal today of course involves Bank Of New York buying Mellon Financial in an all stock deal worth $16.5 billion. The acquisition creates the world's largest securities servicing and asset management company with more than $1.3 trillion under management.
Mellon Financial Corp and Bank of New York will be merging in a deal most on the Street feel makes good sense. BK shareholders will get 0.9434 shares in the new company while Mellon shareholders will receive 1 share. The combined company will be the world's largest asset custodian and corporate trustee.
Mergers and acquisitions momentum has driven the markets today. Four big deals were initiated: Bank of New York and Mellon Financial; LSI Logic and Agere Systems; Pilgrim’s Pride and Gold Kist; and Station Casinos got a buyout offer from a group including its chairman for $4.7 billion.
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A bit more on this M&A Monday--we mentioned LSI Logic buying Agere Systems. Now it's the Bank of New York announcing its intentions to buy Mellon Financial for $16.5 billion dollars in stock. The new company will have $1.1 trillion dollars in assets under management – making it one of the top 10 asset managers in the world.