FleetBoston Adds Bulk in New Jersey for Reasonable Price
Summit may be Fleet's last big bank acquisition in the Northeast.
FleetBoston Financial (FBF) agreed to acquire New Jersey's Summit Bancorp (SUB) for about $7 billion in stock. In a conference call with analysts Monday, Fleet's chairman and chief executive officer, Terry Murray, said the Summit deal will probably be his company's last big bank deal in the Northeast because Fleet is already a market leader in several key states. Fleet intends to cut 30% of Summit's costs and close or sell about 85 branches as part of its integration plans.
What It Means for Investors
Wall Street is frowning on this acquisition, but we don't think long-term investors should. Fleet is getting an attractive customer base in markets where it's been trying to get big-- namely suburban New York. If Fleet can sell more of its products to Summit's affluent customer base, we think we have a long-term winner here.
Laura Pavlenko Lutton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.