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Filed by The Chase Manhattan Corporation
Pursuant to Rule 425 under the Securities Act of 1933 and
deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934
Subject Company: J.P. Morgan & Co. Incorporated
Commission File No. 1-5885
Date: September 13, 2000
Except for historical information, all other information in this filing
consists of forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are based upon the
current beliefs and expectations of J.P. Morgan's and Chase's management and are
subject to significant risks and uncertainties. Actual results may differ from
those set forth in the forward-looking statements. These uncertainties include:
the ability to obtain governmental approvals of the merger on the proposed terms
and schedule; the failure of Chase and J.P. Morgan stockholders to approve the
merger; the risk that the businesses will not be integrated successfully; the
risk that the revenue synergies and cost savings from the merger may not be
fully realized or may take longer to realize than expected; disruption from the
merger making it more difficult to maintain relationships with clients,
employees or suppliers; increased competition and its effect on pricing,
spending, third-party relationships and revenues; the risk of new and changing
regulation in the U.S. and internationally. Additional factors that could cause
Chase's and J.P. Morgan's results to differ materially from those described in
the forward-looking statements can be found in the 1999 Annual Reports on Forms
10-K of Chase and J.P. Morgan, filed with the Securities and Exchange Commission
and available at the Securities and Exchange Commission's internet site
(http://www.sec.gov).
The proposed transaction will be submitted to Chase's and J.P.
Morgan's stockholders for their consideration. Such stockholders should read the
joint proxy statement/prospectus regarding the proposed transaction that will be
filed with the SEC and mailed to stockholders. The joint proxy
statement/prospectus will contain important information that stockholders should
consider. Stockholders will be able to obtain a free copy of the joint proxy
statement/prospectus, as well as other filings containing information about
Chase and J.P. Morgan, without charge, at the SEC's internet site
(http://www.sec.gov). Copies of the joint proxy statement/prospectus and the SEC
filings that will be incorporated by reference in the joint proxy
statement/prospectus can also be obtained, without charge, by directing a
request to The Chase Manhattan Corporation, 270 Park Avenue, New York, NY 10017,
Attention: Office of the Corporate Secretary (212-270-6000), or to J.P. Morgan &
Co. Incorporated, 60 Wall Street, New York, NY 10260, Attention: Julie Wojcik
(212-483-2323).
Chase and J.P. Morgan and certain other persons named below
may be deemed to be participants in the solicitation of proxies of Chase's and
J.P. Morgan's stockholders to approve the transaction. The participants in this
solicitation may include the directors and
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executive officers of Chase. A detailed list of the names and interests of
Chase's directors and officers is contained in Chase's proxy statement for its
2000 annual meeting, and a detailed list of the names and interests of J.P.
Morgan's directors and officers is contained in J.P. Morgan's proxy statement
for its 2000 annual meeting.
As of the date of this communication, none of the foregoing
participants individually beneficially owns in excess of 5% of Chase's common
stock, or 5% of J.P. Morgan's common stock. Except as disclosed above and in
Chase's and in J.P. Morgan's proxy statements for their respective 2000 annual
meetings, to the knowledge of Chase and J.P. Morgan, none of the directors
or executive officers of Chase and J.P. Morgan has any interest, direct or
indirect, by security holdings or otherwise, in Chase or J.P. Morgan.
* * *
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[J.P. Morgan logo] [Chase logo]
NEWS RELEASE
FOR IMMEDIATE RELEASE
CONTACTS:
MEDIA:
Joseph M. Evangelisti
JP Morgan
212-648-9589
Jim Finn
Chase
212-270-7438
INVESTOR RELATIONS:
Ann Patton
JP Morgan
212-648-9446
John Borden
Chase
212-270-7318
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CHASE AND J.P. MORGAN AGREE TO MERGE
New York, September 13, 2000 - - The Chase Manhattan Corporation (NYSE:
CMB) and J.P. Morgan & Co. Incorporated (NYSE: JPM) today announced that they
have agreed to merge. The merged firm will be named J.P. Morgan Chase & Co.
Leveraging premier brands and comprehensive capabilities across an unparalleled
client franchise, J.P. Morgan Chase & Co. will be a formidable global competitor
in financial services, positioned for superior growth and profitability.
The merged company will have assets of approximately $660 billion and
stockholders' equity of more than $36 billion. On a pro-forma basis, J.P. Morgan
Chase & Co. in 1999 would have had net income of approximately $7.5 billion and
revenues of approximately $31 billion.
The merger agreement, which has been approved by the boards of directors of both
companies, provides that 3.7 shares of Chase common stock will be exchanged for
each share of J.P. Morgan common stock. Each series of preferred stock of J.P.
Morgan will be exchanged for a similar series of preferred stock of Chase, the
surviving corporation of the merger. The transaction is expected to be accounted
for as a pooling of interests and to be tax-free to J.P. Morgan and Chase
stockholders. Based upon Chase's closing price yesterday, the transaction would
have a value of approximately $207 for each share of J.P. Morgan common stock.
-more-
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The wholesale business will be known globally as J.P. Morgan and will encompass
investment banking (including strategic advisory, equity and debt capital
raising, credit, and global trading and market-making activities), operating
services, wealth management, institutional asset management and private equity.
The retail business will be known as Chase, consisting of credit cards, regional
consumer banking in the New York tri-state area and Texas, mortgage banking,
diversified consumer lending, insurance and middle-market banking.
Douglas A. Warner III, Chairman and CEO of J.P. Morgan, will become Chairman of
J.P. Morgan Chase & Co. and co-Chair of the firm's Executive Committee, its
senior policy making management group, comprised of senior executives from both
Chase and J.P. Morgan. William B. Harrison, Jr., Chairman and CEO of Chase, will
become President and CEO of J.P. Morgan Chase & Co. and co-Chair of the
Executive Committee. In addition to Messrs. Warner and Harrison, the Board of
Directors of J.P. Morgan Chase & Co. will consist of eight members from the
current Chase board and five members from the current J.P. Morgan board.
"This merger is a breakthrough for J.P. Morgan and Chase that will position the
new firm as a global powerhouse," said Mr. Warner. "With a formidable client
franchise and a potent array of capabilities to address the full spectrum of
clients' needs, we see exceptional prospects for sustained growth and
profitability. A diversified revenue stream enhances those prospects. And our
clients will find a common commitment to high standards of integrity, excellence
and service."
Mr. Harrison said, "This transaction combines the most comprehensive group of
clients with extensive financial and intellectual capital. We will have the
capability to meet our clients' needs anywhere in the world with trusted advice
and integrated execution. Our new firm will have leadership positions across a
broad array of businesses in growth markets." (See attached table.)
"Our past mergers have demonstrated that the expansion of product capabilities
applied to a complementary set of clients results in incremental revenue growth.
Expense savings will also result as we combine duplicate functions. As in the
past, we will focus on a smooth integration and make the new organization the
best of both," said Mr. Harrison.
The members of the Executive Committee, reporting to Mr. Harrison, will be:
Geoffrey T. Boisi, David A. Coulter, Ramon de Oliveira, Walter A. Gubert, Thomas
B. Ketchum, Donald H. Layton, James B. Lee, Jr., Marc J. Shapiro and Jeffrey C.
Walker.
Mr. Gubert will be chairman of the J.P. Morgan investment bank. Messrs. Boisi
and Layton will be co-CEOs of the investment bank and coordinate all of the
wholesale banking activities. Mr. Lee will head the investment bank's new
business and commitments committees, working with many of the firm's most
important clients on new business initiatives. Mr. de Oliveira will head the
institutional asset management and wealth management businesses.
-more-
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Mr. Coulter will continue to head the retail business of the firm and lead its
Internet initiatives. Mr. Walker will continue as head of the new firm's private
equity group. Mr. Shapiro will continue in his present capacity as head of
finance, risk management and administration. Mr. Ketchum will co-chair the
merger transition team with Mr. Shapiro.
In addition, Denis J. O'Leary and Nicolas S. Rohatyn will co-head the
combination of Chase.com and LabMorgan, reporting to Mr. Coulter.
Chase and J.P. Morgan announced the following additional senior management
positions: Dina Dublon, chief financial officer, John J. Farrell, human
resources, Frederick W. Hill, marketing and communications, and William H.
McDavid, general counsel.
Neal Garonzik, vice chairman of Chase, has decided to leave the firm. Mr.
Harrison said, "A little over a year ago, Neal agreed to join Chase for a period
of time to help us with our equity and asset management strategies. While he was
here, we acquired both Hambrecht & Quist and Robert Fleming and saw major
improvements in the quality and profitability of our wealth management
businesses. Neal's experience has been invaluable and we will continue to seek
his advice."
The merger is expected to result in synergies of approximately $1.9 billion
(pre-tax), consisting of estimated cost savings of approximately $1.5 billion
(pre-tax) and estimated incremental net revenues of approximately $400 million
(pre-tax). The synergies are anticipated to be achieved by the end of the second
year following the merger, with one-third estimated to be realized in the first
year. It is anticipated that the merger will result in costs of approximately
$2.8 billion (pre-tax), a portion of which will be taken as a charge upon
closing.
The worldwide headquarters of J.P. Morgan Chase & Co. will be in Manhattan,
although no decision has been made as to the exact location.
Chase and J.P. Morgan have granted each other options to purchase up to 19.9
percent of the outstanding shares of each other's common stock upon the
occurrence of certain events.
The deal is expected to close in the first quarter of 2001 and is subject to
approval by shareholders of both companies, as well as by U.S. Federal and state
and foreign regulatory authorities.
Chase Securities Inc. served as financial advisor to Chase and rendered a
fairness opinion to its Board of Directors. J.P. Morgan Securities Inc. served
as financial advisor to J.P. Morgan and rendered a fairness opinion to its Board
of Directors.
Chase can be reached on the Web at WWW.CHASE.COM, and J.P. Morgan's web address
is WWW.JPMORGAN.COM.
-more-
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CHASE AND J.P. MORGAN WILL HOLD A PRESENTATION FOR THE INVESTMENT
COMMUNITY TODAY, SEPTEMBER 13, 2000 AT 11:30AM EASTERN DAYLIGHT TIME TO DISCUSS
THE PROPOSED MERGER. A LIVE AUDIO WEBCAST OF THE PRESENTATION WILL BE AVAILABLE
ON CHASE'S AND J.P. MORGAN'S INVESTOR RELATIONS SITES AT THEIR RESPECTIVE
WEBSITES NOTED ABOVE. IN ADDITION, PERSONS INTERESTED IN LISTENING TO THE
PRESENTATION MAY DIAL IN AT (973) 628-7055.
This press release contains statements that are
forward-looking within the meaning of the Private Securities Litigation Reform
Act of 1995. Such statements are based upon the current beliefs and expectations
of J.P. Morgan's and Chase's managements and are subject to significant risks
and uncertainties. Actual results may differ from those set forth in the
forward- looking statements. These uncertainties include: the inability to
obtain governmental approvals of the merger on the proposed terms and schedule;
the failure of Chase and J.P. Morgan stockholders to approve the merger; the
risk that the businesses will not be integrated successfully; the risk that the
revenue synergies and costs savings anticipated from the merger may not be fully
realized or may take longer to realize than expected; disruptions from the
merger making it more difficult to maintain relationships with clients,
employees or suppliers; increased competition and its effects on pricing,
spending, third-party relationships and revenues; and the risks of new and
changing regulation in the U.S. and internationally. Additional factors that
could cause Chase's and J.P. Morgan's results to differ materially from those
described in the forward- looking statements can be found in the 1999 Annual
Reports on Form 10-K of Chase and J.P. Morgan filed with the Securities and
Exchange Commission.
# # #
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FACTS ABOUT J.P. MORGAN CHASE & CO.
Financial Highlights
(US dollars)
As of December 31, 1999, pro forma
$660 billion in Total Assets
$36 billion in Stockholders' Equity
For Full Year 1999, pro forma
$31 billion of Revenues
$7.5 billion of Earnings
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Earnings by Line of Business, pro forma, first half 2000
<TABLE>
<CAPTION>
% of total
----------
<S> <C>
Investment Banking 55%
National Consumer Services 18%
Private Equity 12%
Wealth Management 9%
Operating Services 6%
----
100%
</TABLE>
Market Leadership Positions
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Full Year 1999 First Half 2000
------------- ---------------
<S> <C> <C>
STRATEGIC ADVISORY (M&A)
Global Completed Transactions 5 4
European Completed Transactions 3 4
CAPITAL RAISING
Global Syndicated Loans 1 1
Global Investment Grade Debt 3 3
Global Common Stock 8 7
High Yield Global Offerings 3 5
WEALTH MANAGEMENT
#3 among U.S. institutions, with $720 billion of assets under management
(pro forma as of 12/31/99).
</TABLE>
# # #
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[Chase Employee Communication}
[Chase logo]
[Message from Bill Harrison]
September 13, 2000
Dear Colleagues:
We are announcing this morning our decision to merge with J.P. Morgan, creating
a global financial services leader that will rank among the world's most
profitable companies.
Together, J.P. Morgan and Chase will have exceptional competitive advantages in
the highest growth areas of our industry. The combination will create a greatly
expanded client list, a complete range of product expertise and experience, and
an enlarged global network -- a terrific strategic fit that provides for
significant revenue growth potential.
Our clients will benefit from a company that can meet any of their financial
needs -- anywhere in the world -- from private equity and asset management, to
investment banking and operating services. They will also benefit from a highly
talented team of professionals, a team that shares a mutual dedication to
integrity, excellence and partnership. Add to these advantages the strength of
our U.S. consumer franchise, and we have all the ingredients to power a winning
growth strategy.
Our new company will be called J.P. Morgan Chase & Co., which capitalizes on the
worldwide recognition of both names. We also want to capitalize on the
particular strengths of each name in our two main markets. Therefore our
wholesale businesses will be known globally under the name J.P. Morgan. Our
consumer businesses will be known by the name Chase.
Sandy Warner, J.P. Morgan's chairman and CEO, will become chairman of J.P.
Morgan Chase and co-chairman of the firm's Executive Committee. I will become
president and chief executive officer of the new company, and co-chair of the
Executive Committee. The members of the Executive Committee, reporting to me,
are Geoff Boisi, David Coulter, Ramon de Oliveira, Walter Gubert, Thomas
Ketchum, Don Layton, Jimmy Lee, Marc Shapiro and Jeff Walker.
Our merger is all about growth, but it will also provide opportunities to
increase efficiency and reduce expenses. We expect savings from combining
facilities and systems. Where there are overlapping jobs, some positions may
need to be eliminated. Any decisions will be made fairly and objectively, on a
case-by-case basis.
We anticipate the merger will close during the first quarter of 2001. You will
find details of the transaction in the attached press release, and slides that
we will use later today at a meeting with financial analysts and the news media.
You will also find attached a copy of Sandy's letter to J.P. Morgan's employees.
An e-mail box for your questions and comments will be set up in the near future,
but in the meantime I hope you begin to share them with me so we can address
them in future communications. We intend to keep the information flow strong and
steady.
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Many of you have worked on previous mergers, and are well aware of the
challenges and opportunities before us. We have a great track record of
integrating companies, and I believe that J.P. Morgan Chase will prove equally
successful. Please join Sandy and me in fulfilling the enormous potential before
us.
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[J.P. Morgan Employee Communication]
13 September 2000
To: All Morgan Colleagues
From: Sandy Warner
A few minutes ago we announced that J.P. Morgan and Chase have agreed to merge.
The new J.P. Morgan Chase & Co. will be a formidable global competitor with
extraordinary combined resources and superior growth potential. You'll find the
details in the news release and other materials accessible through MorganToday
and our public website. Here I want to tell you why our Board, our management
team, and I decided to take this step - an historic one by any measure.
From the experienced pro to the newest analyst, all of us have poured energy,
ideas, and aspirations into J.P. Morgan. We have built superb capabilities in
investment banking, markets, asset management, and e-finance; competed
successfully against the best institutions in the world; and above all won the
confidence of our clients through objective advice, fair dealing, and great
solutions. We transformed this firm. And we have delivered increasingly strong
financial performance.
Now, by joining forces with Chase, we stand to vastly accelerate growth. It's
that simple. This opportunity arises from a powerful combination of clients,
capabilities, and people.
Together, we can leverage our brand, and our combined breadth and depth of
expertise, across a client base of unparalleled scope and diversity. We will
create an institution that works to meet the spectrum of client needs with a
full complement of top-tier capabilities. We will generate more capacity to
invest for the future. And we will create unprecedented opportunities for highly
talented people in a global growth business.
Until now, no business combination has presented a value proposition more
compelling than J.P. Morgan's alone. This transaction in fact would not have
made sense for either firm without the transformation of recent years achieved
by both. Focus on clients, pursuit of excellence, and strong values are integral
to the heritage of both Chase and J.P. Morgan. Chase's drive to win matches our
own. And the mutual respect that our management teams have developed will, I
believe, extend throughout our firms as colleagues come to know one another.
This is the right course, the right partner, and the right time.
Bill Harrison of Chase will become president and chief executive officer of the
new firm, and I will become chairman. We will co-chair an Executive Committee,
whose members are Geoff Boisi, David Coulter, Ramon de Oliveira, Walter Gubert,
Tom Ketchum, Don Layton, Jimmy Lee, Marc Shapiro, and Jeff Walker. In addition,
Clayton Rose will be chief operating officer of the investment bank; Bill
Winters will be co-head of markets; and Nick Rohatyn will co-head the
combination of Chase.com and LabMorgan.
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This merger is about growth, but there are also efficiencies that can be
realized as we integrate. There will be savings from combining facilities and
systems, and inevitably some overlapping jobs. Any decisions on positions to be
eliminated will be made fairly and objectively, case by case.
You will have many questions, and we pledge to answer them as directly and
promptly as we can in the coming days and months. As a first step, Bill Harrison
and I will host a "town meeting" for employees Thursday at 9:00 a.m. (New York
time). An audiotape will be available to all. For details on this and other
news, check MorganToday, where we will post ongoing bulletins to keep you
informed. You'll also be able to ask questions through an electronic question
box.
I cannot write, and you cannot read, this message without being conscious of the
great heritage of J.P. Morgan. We are uniting two firms that have helped shape
the world of finance, each in its own way. It's my conviction that the new J.P.
Morgan Chase & Co. will enrich our legacy and carry it stronger into the future.
In closing, I ask you to stay focused on our clients as we embark on the
transition, and engage in this new enterprise with wholehearted optimism. Our
potential for growth and success is tremendous.
This communication is for informational purposes only. It is not intended as an
offer or solicitation for the purchase or sale of any financial instrument or
as an official confirmation of any transaction. All market prices, data and
other information are not warranted as to completeness or accuracy and are
subject to change without notice. Any comments or statements made herein do not
necessarily reflect those of J.P. Morgan & Co. Incorporated, its subsidiaries
and affiliates.
* * *
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On September 13, 2000, Chase and J.P. Morgan held a meeting for the investment
community to discuss the merger of Chase and J.P. Morgan. A copy of the slides
shown at the meeting and available on the webcast follows.
[JPMORGAN LOGO] [CHASE LOGO]
A WINNING GROWTH STRATEGY
SEPTEMBER 13, 2000
<PAGE> 15
<TABLE>
<CAPTION>
A WINNING GROWTH STRATEGY
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- UNPARALLELED CLIENT BASE
- LEADING GLOBAL CAPABILITIES [ARROW GRAPHIC] PEOPLE [ARROW GRAPHIC] UNIQUE
& COMPETITIVE
TECHNOLOGY ADVANTAGE
- PRODUCT LEADERSHIP IN GROWTH MARKETS
</TABLE>
[JPMORGAN LOGO] [CHASE LOGO]
2
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MEETS THE CRITERIA FOR SUCCESSFUL MERGERS
-----------------------------------------
- STRATEGIC FIT
- ABILITY TO INTEGRATE AND EXECUTE
- FINANCIALLY BENEFICIAL
[JPMORGAN LOGO] [CHASE LOGO]
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ABILITY TO INTEGRATE AND EXECUTE
--------------------------------
- TRACK RECORD OF SUCCESSFUL INTEGRATIONS
- INCLUSIVE APPROACH TO INTEGRATION
- COMMON CULTURAL ELEMENTS
- MORE FOCUSED, LESS COMPLEX THAN PRIOR MERGERS
- RETENTION DRIVEN BY OPPORTUNITY AND INCENTIVES
[JPMORGAN LOGO] [CHASE LOGO]
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<TABLE>
<CAPTION>
A WINNING GROWTH STRATEGY
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- UNPARALLELED CLIENT BASE
- LEADING GLOBAL CAPABILITIES [ARROW GRAPHIC] PEOPLE [ARROW GRAPHIC] UNIQUE
& COMPETITIVE
TECHNOLOGY ADVANTAGE
- PRODUCT LEADERSHIP IN GROWTH MARKETS
</TABLE>
[JPMORGAN LOGO] [CHASE LOGO]
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THE NEW COMPETITIVE MODEL
-------------------------------------------------------------------------
SERVING THE SPECTRUM OF CLIENTS' NEEDS GLOBALLY
[SPECTRUM CIRCLE GRAPHIC]
CLIENT ADVISORY RELATIONSHIP
[SURROUNDED BY THE FOLLOWING ITEMS:]
M&A
PRIVATE EQUITY
FX & DERIVATIVES
RESEARCH
OPERATING SERVICES
CLIENT ADVISORY RELATIONSHIP
EQUITY
PUBLIC DEBT
BANK DEBT
SALES & TRAINING
STRUCTURING
WEALTH MANAGEMENT
[JPMORGAN LOGO] [CHASE LOGO]
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COMPLEMENTARY STRENGTHS
--------------------------------------------------------------------------------
The New J.P. Morgan
<TABLE>
<CAPTION>
CLIENTS GEOGRAPHIES PRODUCTS
<S> <C> <C>
- Investment Grade - North America - Wealth Management
- Non-Investment Grade - Europe - M&A
- New Economy - Japan - Equity
- Financial Sponsors - Asia (ex-Japan) - Research
- High Net Worth - Latin America - Debt (public/bank)
- Financial Institutions - FX & Derivatives
- Institutional Investors - Private Equity
- Operating Services
</TABLE>
[JPMORGAN LOGO] [CHASE LOGO]
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COMPLEMENTARY STRENGTHS
-------------------------------------------------------------------------------
UNPARALLELED CLIENT BASE
J.P. MORGAN CHASE
---------------------------- -----------------------------
- Blue Chip Investment Grade - Non-Investment Grade
- Europe - New Economy/Emerging Growth
- Japan - Asia (ex-Japan)
- Financial Sponsors
J.P. MORGAN AND CHASE
-------------------------
- Latin America
- U.S. Corporates
- High Net Worth
- Financial Institutions
- Institutional Investors
[JPMORGAN LOGO] [CHASE LOGO]
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Complementary strengths
-------------------------------------------------------------------------------
LEADING GLOBAL CAPABILITIES
PRO FORMA REVENUES(1)
[PIE CHART]
North America 52%
Europe 30%
Asia Pacific 12%
Latin America 6%
THE MOST GLOBALLY BALANCED WHOLESALE FINANCIAL SERVICES FIRM
NOTES:
Source: Company filings
(1) As of 12/31/99; pro forma, including Robert Fleming and excluding National
Consumer Services
[JPMORGAN LOGO] 9 [CHASE LOGO]
<PAGE> 23
Complementary strengths
-------------------------------------------------------------------------------
PRODUCT LEADERSHIP IN GROWTH MARKETS
<TABLE>
<CAPTION>
J.P. MORGAN CHASE
----------- -----
<S> <C>
- Equity Underwriting - New Economy and Asian Equities
- Equity & Structured Derivatives - FX & Interest Rate Derivatives
- Global M&A - Europe - Global M&A
- Europe Fixed Income - Syndicated & Leveraged Finance
- U.S. Asset Management - European & Asian Asset Mgmt.
- LabMorgan - Chase.com
- Operating Services
</TABLE>
[JPMORGAN LOGO] 10 [CHASE LOGO]
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PRODUCT LEADERSHIP IN GROWTH MARKETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995-1999
COMPOUND
MARKET 1999 MARKET SIZE ANNUAL GROWTH
------ ---------------- -------------
<S> <C> <C>
Derivatives - OTC $88 trillion 35%
Global FX market turnover 574 trillion 26
Global corporate debt issuance 3 trillion 22
Global syndicated finance 1.8 trillion 10
Global equity issuance 467 billion 25
Global M&A 3.4 trillion 40
European M&A 1.5 trillion 50
European capital markets issuance 1.3 trillion 31
Emerging markets debt trading (1) 2.2 trillion 17
Private pension fund assets 5.6 trillion 13
Mutual fund assets (U.S.) 6.8 trillion 25
Private equity investments 182 billion 50
Affluent households (U.S.) 7.1 million 19
</TABLE>
NOTES:
------
Sources: Various
(1) 1992-1999
[JPMORGAN LOGO] [CHASE LOGO]
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PRODUCT LEADERSHIP IN GROWTH MARKETS
--------------------------------------------------------------------------------
Summary League Table Rankings
<TABLE>
<CAPTION>
PRO FORMA
1999 1H2000
---- ------
<S> <C> <C>
|-GLOBAL SYNDICATED LOANS(1) 1 1
| GLOBAL INVESTMENT GRADE(1)(2) 3 3
|-HIGH YIELD GLOBAL OFFERINGS(1)(2) 3 5
| European Completed Transactions 3 4
M&A(3) -|
| Global Completed Transactions 5 4
COMMON | US Offerings 6 6
STOCK(1) -|
| Global Offerings 8 7
</TABLE>
NOTES:
Sources: Loanware, MCM, SDC; pro forma for CSFB's acquisition of DLJ
(1) Full Credit to Book Manager, equal if joint
(2) Includes Public 144A
(3) Credit to target and acquiring advisors
[JPMORGAN LOGO] [CHASE LOGO]
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PRODUCT LEADERSHIP IN GROWTH MARKETS
Awards and Rankings in Risk Management
J.P. MORGAN CHASE
Derivatives House of the Year(1) #1 FX Bank Overall(4)
#1 Credit Derivatives(2) #1 Interbank Market-Making in London(3)
#1 Complex Risk Management Top House Currency Products Overall(5)
Strategies(3)
#1 Overall Risk Management(3) Best Overall Derivatives Dealer(6)
Sources:
(1) IFR, Corporate Finance (4) Global Investor
(2) Institutional Investor (5) Risk
(3) Euromoney (6) Derivatives Strategy
[JPMORGAN LOGO] 13 [CHASE LOGO]
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COMPLEMENTARY STRENGTHS -- THE POTENTIAL
----------------------------------------
3 EXAMPLES:
- WEALTH MANAGEMENT
- EQUITY DERIVATIVES
- EUROPE
[JPMORGAN LOGO] [CHASE LOGO]
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A LEADER IN WEALTH MANAGEMENT
----------------------------------------------------------------------------
ASSETS UNDER MANAGEMENT AS OF 12/31/99(1)
-----------------------------------------
<TABLE>
<S> <C> <C>
RANK US INSTITUTIONS AUM($B)
---- --------------- -------
1 Fidelity Investments $956
2 Barclays Global Advisors 783
3 J.P. MORGAN/CHASE PRO FORMA (2) 720
4 State Street Global Advisors 672
5 Capital Group Cos. 558
6 Merrill Lynch Asset Mgmt 557
7 Mellon Financial 463
8 AXA Financial 463
9 Morgan Stanley Dean Witter 420
10 Citigroup 419
</TABLE>
NOTES:
------
Source: Institutional Investor
(1) Global rankings of investment management firms by assets under management
("AUM")
(2) Includes $48 billion for pro rata share of American Century; pro forma for
Robert Fleming
[JPMORGAN LOGO] [CHASE LOGO]
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A LEADER IN WEALTH MANAGEMENT
--------------------------------------------------------------------------------
A balanced business
[PIE CHART]
<TABLE>
<CAPTION>
PRO FORMA BY ASSET CLASS(1)
---------------------------
<S> <C>
Equities 52%
Fixed Income 25%
Cash/Other 23%
</TABLE>
[PIE CHART]
<TABLE>
<CAPTION>
PRO FORMA BY GEOGRAPHIC REGION(1)
---------------------------------
<S> <C>
USA 65%
International 35%
</TABLE>
[PIE CHART]
<TABLE>
<CAPTION>
PRO FORMA BY CLIENT(1)
--------------------------
<S> <C>
Institutional 60%
Private Client 40%
</TABLE>
NOTE:
(1) Assets under management as of 12/31/99. Includes $48 billion for pro rata
share of American Century; pro forma for Robert Fleming
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<PAGE> 30
A LEADER IN EQUITY DERIVATIVES
-----------------------------------------------------------------------
Pro forma Revenues
[BAR CHART]
<TABLE>
<CAPTION>
1997 1998 1999 2000 YTD
ANNUALIZED
---- ---- ---- ----------
($ in millions)
<S> <C> <C> <C> <C>
J.P. Morgan........ 209 367 968 1,487
Chase.............. 21 57 158 270
</TABLE>
STRONGER PRODUCT CAPABILITY WITH BROADER CLIENT REACH LEADING TO:
SIGNIFICANT GROWTH OPPORTUNITY
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<PAGE> 31
A LEADER IN EUROPE
---------------------------------------------------
Complementary Strengths
J.P. MORGAN CHASE
----------- -----
- A LEADING FRANCHISE - SYNDICATED & LEVERAGED FINANCE
- M&A - NEW ECONOMY ADVISORY
- EQUITY - ASSET MANAGEMENT
- INVESTMENT GRADE DEBT - OPERATING SERVICES
- DERIVATIVES - FX & INTEREST RATE DERIVATIVES
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<PAGE> 32
CRITERIA FOR MERGERS
----------------------------------
- Strategic fit
- Ability to integrate and execute
- FINANCIALLY BENEFICIAL
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<PAGE> 33
KEY TRANSACTION TERMS
_____________________________________________________________________
- Exchange Ratio: Fixed exchange ratio of 3.70 Chase shares for each
J.P. Morgan share
- Structure: Tax-free stock-for-stock merger - intended to be
accounted for as a pooling of interests
- Legal Entity: Chase
- Dividend: Existing Chase dividend of $1.28 per share to be
maintained
- Approvals: Both sets of shareholders and various regulatory
agencies including Federal Reserve, state banking
departments and European Union
- Timing: Shareholder voting during the fourth quarter of
2000
Anticipated closing during the first quarter
of 2001
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<PAGE> 34
ACCRETIVE TO EPS AS SYNERGIES REALIZED
--------------------------------------
J.P. Morgan fully diluted shares 186 million
Exchange 3.7x
-----
Chase Shares Issued 688 million
Chase 2000 consensus EPS(1) $4.00
Required earnings from J.P. Morgan $2.8 billion
J.P. Morgan 2000 consensus earnings(1) 2.1 billion
----
Required break even synergies $0.7 billion
EXPECTED SYNERGIES (AFTER-TAX) $1.2 BILLION
NOTE:
(1) As published by First Call. J.P. Morgan 2000 consensus estimate of $11.47
per share. For analytical purposes only. Does not constitute endorsement of,
or concurrence with, any of the estimates by J.P. Morgan or Chase
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<PAGE> 35
SYNERGIES DRIVE PROFITABILITY AND GROWTH
--------------------------------------------------------------------------------
- Incremental revenue of $1 billion
- net $400 million after incremental expenses
- Savings of $1.5 billion
- 12% of combined relevant expenses
- More conservative than prior mergers
- Reserve and costs of $2.8 billion
- TOTAL SYNERGIES OF $1.9 BILLION ($1.2 BILLION AFTER-TAX) ACHIEVED BY THE END
OF SECOND YEAR
- 1/3 achieved in year one
Note: All numbers are on a pre-tax basis unless otherwise noted
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<PAGE> 36
A WINNING GROWTH STRATEGY
--------------------------------------------------------------------------------
($ in billions)
<TABLE>
<CAPTION>
LTM PRO FORMA(1)
------------------------
PRE-TAX
REVENUES CASH EARNINGS
-------- -------------
<S> <C> <C> <C>
Investment Banking $15.9 $5.9
WELL BALANCED
Wealth Management 3.7 1.0
Private Equity 3.4 3.0
HIGHER GROWTH
Operating Services 3.3 0.9
National Consumer Svcs. 9.9 2.6
</TABLE>
NOTE:
-----
(1) Last twelve months (LTM) ending June 30, 2000; pro forma, including Robert
Fleming
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<PAGE> 37
THE CASE FOR HIGHER VALUATION
------------------------------------------------------------------------------
- Higher growth
- Leadership drives higher returns
- Greater diversification/risk reduction
- Free cash flow generation
- Completes the platform
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<PAGE> 38
A WINNING GROWTH STRATEGY
--------------------------------------------------------------------------------
DRIVEN BY:
-- THE NEW COMPETITIVE MODEL
-- Unparalleled client base
-- Leading global capabilities
-- Product leadership in growth markets
-- A COMMITMENT TO FINANCIAL DISCIPLINE
-- BUILDING SHAREHOLDER VALUE
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<PAGE> 39
-------------------------------------------------------------------------------
This presentation contains statements that are forward-looking within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements are based upon the current beliefs and expectations of J.P. Morgan's
and Chase's management and are subject to significant risks and uncertainties.
Actual results may differ from those set forth in the forward-looking
statements. These uncertainties include: the ability to obtain governmental
approvals of the merger on the proposed terms and schedule; the failure of
Chase and J.P. Morgan stockholders to approve the merger; the risk that the
businesses will not be integrated successfully; the risk that the revenue
synergies and cost savings from the merger may not be fully realized or may
take longer to realize than expected; disruption from the merger making it more
difficult to maintain relationships with clients, employees or suppliers;
increased competition and its effect on pricing, spending, third-party
relationships and revenues; the risk of new and changing regulation in the U.S.
and internationally. Additional factors that could cause Chase's and J.P.
Morgan's results to differ materially from those described in the
forward-looking statements can be found in the 1999 Annual Reports on Form 10-K
of Chase and J.P. Morgan, filed with the Securities and Exchange Commission.
[JPMORGAN LOGO] 26 [CHASE LOGO]
