Merger - Regions and Union Planters Essay

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Merger of Union Planters Corporation and Regions Financial Corporation
On Friday, January 23, 2004 Union Planters Corporation and Regions Financial Corporation announced they would merge. This will create the twelfth largest holding company in the United States. This merger was deemed the merger of equals (Hillard, 1/26/2004, para. 2). The stockholders of both companies overwhelming voted for the merger on June 8, 2004 (Morgan, 6/17/2004, para. 2). On June 17, 2004 the merger received approval from the Federal Reserve, the last of the governmental approvals needed (Morgan, 6/17/2004, para. 1). The merger effective date was July 1, 2004, when the Union Planters stock symbol ceased to exist (Morgan, 6/17/2004, para. 5).
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Regions’ is a member of Forbes and Fortune 500 (Morgan, 1/23/04, para. 17). Regions revenues also declined 8.44% from 2002 to 2003. Their net income increase 5.15% between 2003 and 2004. Regions three year compounded annual growth for net income was .09% and .04% for five years (Thompson, 12/2003-5/2004). Regions also does not have a good track record of integrating their mergers (Goldberg, Jason, 1/26/2004, para. 20). Profit growth for Regions lagged behind the industry average in 2003 (1/24/2004, para. 1).
Both banks are similar in size, corporate culture, and operations. There is very little overlap of their branches. Regions and Union Planters have a total of 1,383 branches in fourteen states. As you can see from the table below, Regions and Union Planters only have overlapping branches in six states. Tennessee creates the biggest challenge for consolidation with seventy-two branches in twelve cities. However, consolidation of branches in large cities such as Memphis, Tennessee may not be a problem. Depending on where each branch is located, the closing of branches may be minimal. This is a very important factor when companies merge due to job loss and moral. Hopefully most of the jobs losses will be through attrition and if jobs must be eliminated then it should be minimal. The new regions bank expects to increase opportunities for their employees (Jeter, 2/09/2004).
Regions Financial Corporation and Union

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