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December 4, 2006
The Bank of New York Company, Inc. and Mellon Financial Corporation Agree to Merge
Create the Global Leader in Securities Servicing and Asset Management.
Merger Combines Highly Complementary Businesses Positioned for Strong Global Growth.
NEW YORK and PITTSBURGH, Dec. 4 — The Bank of New York Company, Inc. (NYSE:BK) and Mellon Financial Corporation (NYSE:MEL) announced today they have entered into a definitive agreement to merge, creating the largest securities servicing and asset management firm globally.
PHOTO: Tom Renyi, Chairman and CEO of The Bank of New York, and Bob Kelly, Chairman, President and CEO of Mellon.
The new company, which will be called The Bank of New York Mellon Corporation, will be the world’s leading asset servicer with $16.6 trillion in assets under custody and corporate trustee with $8 trillion in assets under trusteeship, and will rank among the top 10 global asset managers with more than $1.1 trillion in assets under management.
Thomas A. Renyi, currently chairman and chief executive of The Bank of New York, will serve as executive chairman of The Bank of New York Mellon Corporation for 18 months following the close of the transaction with overall responsibility for the integration of the two companies.
Robert P. Kelly, currently president, chairman and chief executive officer of Mellon, will serve as chief executive officer of the new company and will succeed Mr. Renyi as chairman of the board. Gerald L. Hassell, currently president of The Bank of New York, will hold the same position in the new company. The board of directors will comprise 10 members designated by The Bank of New York and eight members designated by Mellon. The new company’s headquarters will be based in New York City while maintaining a strong and growing presence in Pittsburgh.
Mr. Renyi said: “We are creating one of the world’s leading financial services growth companies. Both our companies focus their businesses in highly attractive sectors of the financial services industry. Together, we will be the global leader in securities servicing, and one of the top providers of asset and wealth management worldwide. Together, we will have the scale, the technology, the capital, and the people we need to compete and win in the rapidly expanding global marketplace.”
Mr. Kelly said: “The merger creates an extraordinarily strong and rapidly growing global competitor in our core businesses. Through this merger, we will be able to invest and expand more effectively than any of our competitors due to our combined scale, profitability and global reach. The organic growth of our respective companies is already strong, and the cost savings and revenue synergies opportunities are excellent. Together, we will have the best service in the world, strong investment performance and the highest fiduciary standards.”
Mr. Renyi continued: “We will be fully focused on delivering the high quality service our customers deserve as we create rewarding opportunities for our employees and superior returns for our shareholders. In addition, our balanced business mix and widespread geographic diversification will position us to move and manage our clients’ assets with the proven expertise and experience that few global companies can match.”
Mr. Kelly added: “Today’s action is clearly in the best long-term interests of our customers, shareholders and employees, as well as the city of Pittsburgh, where we will increase our very strong commitment to the community. We expect Pittsburgh to be home for several business divisions, as well as making it a center of excellence for technology, operations and administration.”
Under the terms of the agreement, The Bank of New York’s shareholders will receive 0.9434 shares in the new company for each share of The Bank of New York that they own and Mellon shareholders will receive one share in the new company for each Mellon share they own. The Bank of New York and Mellon have entered into mutual stock option agreements for 19.9% of the issuer’s outstanding common stock.
The transaction has been unanimously approved by each company’s board of directors and is expected to be completed early in the third quarter of 2007, subject to regulatory and shareholder approvals. Assuming the achievement of planned synergies, on a GAAP basis the transaction is expected to be 1.0% dilutive to The Bank of New York’s operating earnings in 2007, and 1.4% accretive in 2008; it will be 1.0% accretive to Mellon’s operating earnings in 2007, and 5.7% accretive in 2008. On a cash basis, which excludes the impact of non-cash items such as the amortization of intangibles, the transaction is expected to be 1.1% accretive to The Bank of New York’s earnings in 2007, and 5.3% accretive in 2008; it will be 4.5% accretive to Mellon’s earnings in 2007, and 11.9% accretive in 2008.
The combined company today has annual revenues of more than $12 billion, with approximately 28% derived from asset servicing, 38% from issuer services, clearing services and treasury services, and 29% from asset management and private wealth management. It will be well positioned to capitalize on global growth trends, including the evolution of emerging markets, the growth of hedge funds and alternative asset classes, the increasing need for more complex financial products and services, and the increasingly global need for people to save and invest for retirement. Almost a quarter of combined revenue will be derived internationally. With a combined pro forma market capitalization of approximately $43 billion, The Bank of New York Mellon Corporation would become the 11th largest U.S. financial institution.
The companies expect to reduce total pre-tax costs by approximately $700 million per year, or approximately 8.5% of the estimated 2006 combined expense base. The integration will be undertaken by a dedicated and experienced group of senior executives in a thoughtful and deliberate manner over a three year period following the close of the transaction. The transaction will involve restructuring charges of approximately $1.3 billion.
The companies’ combined employee base of 40,000 is expected to be reduced by approximately 3,900 over a three-year period following the transaction. The companies will reduce headcount through normal attrition wherever possible and will provide extensive support to employees impacted by the merger.
The Bank of New York was represented in the transaction by the investment banking firm of Goldman Sachs and the law firm of Sullivan & Cromwell. Mellon was represented by the investment banking firms of UBS Investment Bank and Lazard and the law firms of Simpson Thacher & Bartlett LLP and Reed Smith LLP.
The Bank of New York Company, Inc. is a global leader in providing a comprehensive array of services that enable institutions and individuals to move and manage their financial assets in more than 100 markets worldwide. The Company has a long tradition of collaborating with clients to deliver innovative solutions through its core competencies: securities servicing, treasury management, asset management, and private banking. The Company’s extensive global client base includes a broad range of leading financial institutions, corporations, government entities, endowments and foundations. Its principal subsidiary, The Bank of New York, founded in 1784, is the oldest bank in the United States and has consistently played a prominent role in the evolution of financial markets worldwide. The Company has $12.2 trillion in assets under custody and more than $179 billion in assets under management. Additional information is available at http://www.bankofny.com/.
Mellon Financial Corporation is a global financial services company. Headquartered in Pittsburgh, Mellon is one of the world’s leading providers of financial services for institutions, corporations and high net worth individuals, providing asset management, private wealth management, asset servicing, payment solutions and investor services. Mellon has approximately $5.3 trillion in assets under management, administration or custody, including $918 billion under management. News and other information about Mellon is available at http://www.mellon.com/.
|GlobalGiants.com|
Edited & Posted by the Editor | 7:46 PM | View the original post
LG Mobile Phones Announces Rihanna as Brand Ambassador For Chocolate by LG
Global pop sensation, Rihanna Kicks Off Her New Role as Brand Ambassador with a Star-Studded Event in Las Vegas Today.
SAN DIEGO, Dec. 4 -- LG Electronics MobileComm U.S.A., Inc. (LG Mobile Phones) announced today that they are bringing together two global sensations, Chocolate by LG and Rihanna, to launch their new Chocolate color phones. Chocolate by LG in white, mint green and cherry red were recently introduced to consumers last month.
Rihanna will kick off her new role as brand ambassador tonight by performing at a star-studded post Billboard Music Awards event, titled "The LG Chocolate Party" at Las Vegas' newest nightspot, Moon Nightclub, in the Palms Resort and Casino. The event will be the media and consumer's first opportunity to have hands on time with the new cherry red and mint green Chocolate color phones. Additionally, in between sets from DJ AM and DJ Mom Jeans (a.k.a. Danny Masterson), Rihanna will perform several of her hit singles for guests in this intimate venue. Celebrity attendees include Paris Hilton, Ludacris, the Killers, Chris Brown, Blue October, Nickelback, Nas, Carmen Electra, Bow Wow, Chingy, Three 6 Mafia, Ne-Yo and Young Jeezy.
LG Electronics, Inc. is a global leader and technology innovator in consumer electronics, home appliances and mobile communications.
Edited & Posted by the Editor | 7:32 PM | View the original post
GM Wins First Place in Blue Sky Concept Design
Photo: General Motors' West Coast Advanced Design Studio in southern California produced this entry, the HUMMER O2 Concept, for the 2006 California Design Challenge contest whose theme this year is Environmental Sustainability. The HUMMER O2 two-dimensional Blue Sky Concept offers rugged capability, a 'tread lightly' contact system and construction methods promoting safety, accessibility and re-usability. For example, the HUMMER 02 Concept features a revolutionary phototropic body shell that produces pure oxygen throughout the lifespan of the vehicle. Algae-filled body panels transform harmful carbon dioxide into pure oxygen that is subsequently released back into the environment and inside the vehicle. Four modular and self-contained fuel cells power hydraulic motors are built into each wheel, and to reduce environmental impact, the HUMMER O2's construction utilizes 100 percent post-consumer materials.
LOS ANGELES – GM Advanced Design has won the Los Angeles Auto Show’s Design Challenge for the second year in a row. This year’s winning entry is a two-dimensional rendering of a 2015 Blue Sky Concept that addresses environmental sustainability. Called the HUMMER 02, this design proves that daily use of a vehicle could result in a net gain for the environment.
The 2006 Design Challenge theme is Environmental Sustainability, a challenge for design studios to transform the future of driving into an environmental experience. Contest guidelines also required that vehicle entries be 100-percent recyclable and have a maximum lifespan of just 60 months.
Photo: Members of the General Motors' West Coast Advanced Design Studio team stand with a graphic of their winning entry, the HUMMER O2 Concept, at the Los Angeles Auto Show's Design Challenge Thursday, November 30, 2006 in Los Angeles, California. Members of the team include (l to r) Loren Kulesus, Jussi Timonen, Jose Paris, Steve Anderson and GM West Coast Advanced Design Studio Director Frank Saucedo.
General Motors Corp. (NYSE: GM), the world’s largest automaker, has been the global industry sales leader for 75 years. With global headquarters in Detroit , GM manufactures its cars and trucks in 33 countries. In 2005, 9.17 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall.
Designers at GM’s West Coast Advanced Design Studio in Southern California tackled the far-reaching challenge – to develop a concept that resulted in a net gain for the environment. The GM team crafted an entry that surpasses the contest’s sustainability principles: the HUMMER O2 Concept.
“The HUMMER O2 epitomizes the ethos of the true Southern California outdoors enthusiast with rugged capability, a ‘tread lightly’ contact system and construction methods promoting safety, accessibility and reusability,” said Frank Saucedo, director, GM Advanced Design in California . “Most vehicles in L.A. spend 95 percent of their time outdoors subjected to sunlight, so why couldn’t a vehicle give back?”
To fully understand the HUMMER O2, the GM team believes that terms commonly associated with ecology and biology work best.
Photosynthesis
The HUMMER 02 Concept features a revolutionary phototropic body shell that produces pure oxygen throughout the life of the vehicle. Algae-filled body panels transform carbon dioxide into pure oxygen that is subsequently released back into the environment and inside the vehicle.
“The panels essentially function as the ‘leaves’ of the HUMMER O2 and effectively clean the air in the surrounding environment,” said Saucedo. “Used algae are recycled as biomass for the further production of energy.”
Breathing
The HUMMER 02 promotes the production of oxygen by a two-way valve system in the corner of each panel. The sophisticated devices control and monitor the amount of carbon dioxide and source nutrition needed for the algae cultivation while optimizing oxygen production and distribution.
Energy
Four modular and self-contained fuel cells power hydraulic motors built into each wheel. A hydrogen tank is placed in an ideal central location for safety and structural purposes, becoming the “heart” of the vehicle.
Footprint
Active Tread TM tires provide low resistance on the highway while allowing excellent off-road progress as their shape changes – adapting to and protecting the surrounding environment.
Structure
Finally, to further reduce environmental impact, the HUMMER O2’s construction specifies the use of 100-percent post-consumer materials, including an aluminum frame, seats finished with Volatile Organic Components-free (VOC-free) materials and glazing via PETE (similar to everyday consumer packaging, such as soda bottles).
The GM West Coast Advanced Design Studio won the 2005 Design Challenge competition with its GMC PAD Concept, a mobile urban loft designed for the L.A. environment.
Edited & Posted by the Editor | 3:05 PM | View the original post
