Chase Manhattan Corp The Making of Americas Largest Bank Case Solution

Case Solution

Chase Bank and Chemical Bank intend to merge, allowing the largest commercial bank inside the US, the fourth largest in the world. Forecast-erectile dysfunction financial benefits beneath the merger reflect significant planned reduction in operating costs, including 17,000 worker lay offs. Management also needs the merger to produce significant revenue increases consequently of elevated economic climates of scale and scope, together with other benefits of size and market leadership. The task of prices the merger gains, settling a appropriate merger cost, and using the publish-merger restructuring is extremely complex.

Excel Calculations

·         Changes

·         Equity/Asset Ratio

·         Debt/Asset Ratio

·         Return on equity

·         WACC

·         Estimated gains and expenses

·         Total expenses

·         Overall gain

·         NPV

·         NPV calculations

·         Merger Calculations       

·         Common value of merged companies                                   

·         Premium offered                                            

·         Value of chase                                 

·         Value of chase after premium                                   

·         Share price per Chemical share                                 

·         Value of chase in number of Chemical share after premium (amount of shares exchanged)        

·         Shares after merger                                      

·         New share price   

Questions Covered

1.       Overview

2.       Benefits of formation of Chase Manhattan Bank

3.       Risks

4.       Quantitative Factors

5.       Conclusion

6.       Appendix