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.
