Mellon Financial and the Bank of New York

Posted: 27 Dec 2009

See all articles by Carliss Y. Baldwin

Carliss Y. Baldwin

Harvard Business School

Ryan Taliaferro

Acadian Asset Management

Date Written: December 15, 2009

Abstract

Bob Kelly, the new CEO of Mellon Financial, is considering the terms of a proposed "merger of equals" with The Bank of New York, just before the final Board meeting to approve the deal. The combination offers a great strategic fit, and the expected synergies are large. However, the proposed exchange ration values Mellon at a discount to its last closing price, even though it is the smaller and non-surviving bank. Kelly must consider the various dimensions of the deal -- specifically the value of synergies, the form of consideration, and the deal's impact on the eps of both sides -- and determine whether it is in the best interests of Mellon, the city of Pittsburgh, and Mellon's shareholders.

Suggested Citation

Baldwin, Carliss Y. and Taliaferro, Ryan, Mellon Financial and the Bank of New York (December 15, 2009). HBS Case No. 208-129, Harvard Business School Finance Unit, Available at SSRN: https://ssrn.com/abstract=1527468

Carliss Y. Baldwin

Harvard Business School ( email )

Boston, MA 02163
United States

Ryan Taliaferro (Contact Author)

Acadian Asset Management ( email )

260 Franklin Street
Boston, MA 02110
United States

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