Chemical Bank Agrees To Acquire New Jersey Banking Company
NEW YORK (AP) _ Chemical New York Corp., the nation’s sixth-largest banking concern, announced Thursday it had agreed to acquire one of New Jersey’s biggest bank- holding companies, when permitted by New Jersey banking laws.
In a joint statement, Chemical and Horizon Bancorp., based in Morristown, N.J., stated they had reached a definitive agreement to merge.
The companies said Horizon common stockholders would receive 2.5 times the book value of Horizon’s common equity at the time of the merger. Based on the book value as of March 31, Chemical’s cash payment would total about $465 million, or about $53.39 per outstanding common share, Chemical said.
Horizon has issued Chemical warrants to buy about 18.5 percent of Horizon’s outstanding common shares, and agreed to issue warrants for an additional 6.4 percent upon shareholder approval.
The deal is subject to approval by government regulators and Horizon shareholders.
Under an interstate banking law signed in March by Gov. Thomas Kean, New York and New Jersey banking companies may merge only after 13 states, including four of the largest 10 states as measured by commercial deposits, enacted reciprocal bank merger laws with New Jersey.
As a result, the banking companies said they did not expect the actual merger to take place before Jan. 1, 1989.
″By announcing our merger plans now, in anticipation of changes in the banking laws, we have the opportunity to plan for future growth in a way that best serves our shareholders, customers, employees, and the communities that we serve throughout New Jersey,″ said William J. Shepherd, Horizon’s president and chief executive.
Chemical, which is parent of Chemical Bank, the sixth-largest U.S. bank, has assets of about $57 billion.
Horizon, New Jersey’s fifth-largest banking company, has assets of $3 billion and branches in 17 of New Jersey’s 21 counties. Subsidiaries include Horizon Trust Co. N.A., based in Morristown, and Horizon Trust Co. of Florida, based in Boca Raton.