JPMorgan Chase & Co. (NYSE: JPM) announced it is acquiring The Bear
Stearns Companies Inc. (NYSE: BSC). The Boards of Directors of both
companies have unanimously approved the transaction.
The transaction will be a stock-for-stock exchange. JPMorgan Chase will
exchange 0.05473 shares of JPMorgan Chase common stock per one share of
Bear Stearns stock. Based on the closing price of March 15, 2008, the
transaction would have a value of approximately $2 per share.
Effective immediately, JPMorgan Chase is guaranteeing the trading
obligations of Bear Stearns and its subsidiaries and is providing
management oversight for its operations. Other than shareholder
approval, the closing is not subject to any material conditions. The
transaction is expected to have an expedited close by the end of the
calendar second quarter 2008. The Federal Reserve, the Office of the
Comptroller of the Currency (OCC) and other federal agencies have given
all necessary approvals.
In addition to the financing the Federal Reserve ordinarily provides
through its Discount Window, the Fed will provide special financing in
connection with this transaction. The Fed has agreed to fund up to $30
billion of Bear Stearns’ less liquid assets.
“JPMorgan Chase stands behind Bear Stearns,”
said Jamie Dimon, Chairman and Chief Executive Officer of JPMorgan
Chase. “Bear Stearns’
clients and counterparties should feel secure that JPMorgan is
guaranteeing Bear Stearns’ counterparty risk.
We welcome their clients, counterparties and employees to our firm, and
we are glad to be their partner.”
Dimon added, “This transaction will provide
good long-term value for JPMorgan Chase shareholders. This acquisition
meets our key criteria: we are taking reasonable risk, we have built in
an appropriate margin for error, it strengthens our business, and we
have a clear ability to execute.”
“The past week has been an incredibly
difficult time for Bear Stearns. This transaction represents the best
outcome for all of our constituencies based upon the current
circumstances,” said Alan Schwartz, President
and Chief Executive officer of Bear Stearns. “I
am incredibly proud of our employees and believe they will continue to
add tremendous value to the new enterprise.”
The transaction is expected to be ultimately accretive to JPMorgan Chase’s
annual earnings.
“This transaction helps us fill out some of
the gaps in our franchise with manageable overlap,”
said Steve Black, co-CEO of JPMorgan Investment Bank. “We
know the Bear Stearns leadership team well and look forward to working
with them to bring our two companies together.”
“Acquiring Bear Stearns enables us to obtain
an attractive set of businesses,” said Bill
Winters, co-CEO of JPMorgan Investment Bank. “After
conducting due diligence, we’re comfortable
with the quality of Bear Stearns’ business,
and are pleased to have them as part of our firm.”
“JPMorgan Chase’s
management team has a strong track record of effective merger
integration,” said Heidi Miller, CEO of
JPMorgan Treasury & Securities Services business. “We
will work closely in the coming weeks with Bear Stearns’
clients and management to execute the transaction quickly.”
JPMorgan Chase will host a conference call today, Sunday, March 16,
2008, at 8:00 p.m. (Eastern Time) to review the acquisition of Bear
Stearns. Investors can call (800) 214-0745 (domestic) / (719) 457-0700
(international), with the access code 614424, or listen via live audio
webcast. The live audio webcast and presentation slides will be
available on http://investor.shareholder.com/jpmorganchase/presentations.cfm
under Investor Relations, Investor Presentations. A replay of the
conference call will be available beginning at 11:00 p.m. (Eastern Time)
on March 16, 2008, through midnight, Monday, March 31, 2008 (Eastern
Time), at (888) 348-4629 (domestic) or (719) 884-8882 (international)
with the access code 614424. The replay also will be available on www.jpmorganchase.com.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services
firm with assets of $1.6 trillion and operations in more than 60
countries. The firm is a leader in investment banking, financial
services for consumers, small business and commercial banking, financial
transaction processing, asset management, and private equity. A
component of the Dow Jones Industrial Average, JPMorgan Chase serves
millions of consumers in the United States and many of the world's most
prominent corporate, institutional and government clients under its
JPMorgan and Chase brands. Information about the firm is available at www.jpmorganchase.com.
The Bear Stearns Companies Inc. (NYSE: BSC) serves governments,
corporations, institutions and individuals worldwide. The company’s
core business lines include institutional equities, fixed income,
investment banking, global clearing services, asset management, and
private client services. For additional information about Bear Stearns,
please visit the firm's website at www.bearstearns.com.
This press 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 J.P. Morgan Chase & Co. and The Bear
Stearns Companies Inc., including future financial and operating
results, the combined company’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 J.P. Morgan 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 and self-regulatory organization
approvals of the merger on the proposed terms and schedule, and any
changes to regulatory agencies’ outlook on,
responses to and actions and commitments taken in connection with the
merger and the agreements and arrangements related thereto; the extent
and duration of continued economic and market disruptions; adverse
developments in the business and operations of Bear Stearns, including
the loss of client, employee, counterparty and other business
relationships; the failure of Bear Stearns stockholders to approve the
merger; the risk that the businesses will not be integrated
successfully; the risk that the cost savings and any other 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 business and operational relationships; 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 and the exposure to litigation and/or regulatory
actions. Additional factors that could cause JPMorgan Chase’s
results to differ materially from those described in the forward-looking
statements can be found in the firm’s Annual
Report on Form 10-K for the year ended December 31, 2007 (as amended),
filed with the Securities and Exchange Commission and available at the
Securities and Exchange Commission’s Internet
site (http://www.sec.gov).
Additional Information
In connection with the proposed merger, JPMorgan Chase & Co. will file
with the SEC a Registration Statement on Form S-4 that will include a
proxy statement of Bear Stearns that also constitutes a prospectus of
JPMorgan Chase & Co.. Bear Stearns will mail the proxy
statement/prospectus to its stockholders. JPMorgan Chase & Co. and Bear
Stearns urge investors and security holders to read the proxy
statement/prospectus regarding the proposed merger when it becomes
available because it will contain important information. 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 JPMorgan Chase
& Co.’s website (www.jpmorganchase.com)
under the tab “Investor Relations”
and then under the heading “Financial
Information” then under the item “SEC
Filings”. You may also obtain these
documents, free of charge, from Bear Stearns’s
website (www.bearstearns.com)
under the heading “Investor Relations”
and then under the tab “SEC Filings.”
JPMorgan Chase, Bear Stearns and their respective directors, executive
officers and certain other members of management and employees may be
soliciting proxies from Bear Stearns stockholders in favor of the
merger. Information regarding the persons who may, under the rules of
the SEC, be deemed participants in the solicitation of the Bear Stearns
stockholders in connection with the proposed merger will be set forth in
the proxy statement/prospectus when it is filed with the SEC. You can
find information about JPMorgan Chase’s
executive officers and directors in its definitive proxy statement filed
with the SEC on March 30, 2007. You can find information about Bear
Stearns’s executive officers and directors in
definitive proxy statement filed with the SEC on March 27, 2007. You can
obtain free copies of these documents from JPMorgan Chase and Bear
Stearns using the contact information above.
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