At a news conference, Dow Ritter downplayed that aspect of the merger, saying those employees will be retained by the new owners, reducing the net job loss resulting from the deal. Ritter cited a ten percent "headcount reduction" in discussing possible cutbacks.
"And, the employees that work there will come off of our payroll and count in that number when I say we may have ten percent headcount reduction."
The merger will create one of the top 10 bank holding companies in the country.
The new company will have almost $140 billion in assets, hold nearly $100 billion in deposits and operate 2,000 branches in 16 states across the South, Midwest and Texas. Combined, the two companies employ 37,000 people. The Regions name will be retained.
Regions entered the Gainesville/northeast Georgia market in 1996 when it merged with Gainesville-based First National Bancorp.
Jackson W. Moore, 57, chairman, president and chief executive officer of Regions, will be chairman of the combined company. C. Dowd Ritter, 58, chairman, president and chief executive officer of AmSouth, will be the president and chief executive officer of Regions.
"AmSouth shares Regions' passion for delivering superior customer service, and the combined company will be in an excellent position to raise service standards," said Moore. "Our companies have similar goals, shared values and solid experience in putting organizations together. We will take a deliberate, methodical approach to integrating our companies, making certain that customers continue to receive high quality service.
"I am confident the new Regions will emerge as the leading regional financial services provider, delivering superior shareholder returns on a consistent basis."
"Combining AmSouth and Regions creates a company with market-leading positions in some of the best markets in the country," said Ritter.
"These companies complement each other in many ways, and together, led by one of the strongest management teams in the business, we will have an even greater ability to deliver superior service to our customers. All of that translates to a greater opportunity for increased shareholder value. The appeal of this combination by every measure - strategically, financially or operationally - is extraordinary."
The agreement provides for a stock-for-stock merger in which 0.7974 shares of Regions will be exchanged, on a tax-free basis, for each share of AmSouth common stock. Based upon closing stock prices of both companies on May 24, 2006, the proforma combined market capitalization of the new institution would be approximately $26 billion.
As part of the transaction, it currently is expected that the new company will initially pay a dividend of 35 cents per share per quarter, which is the current Regions quarterly dividend rate and represents an increase of approximately 7 percent for AmSouth shareholders. All dividends are subject to applicable law and the discretion of the applicable company's board of directors.
(A more detailed story is posted on the AccessNorthGa.com Business page.)
http://accesswdun.com/article/2006/5/109866