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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) - July 24, 1998
MELLON BANK CORPORATION
(Exact name of registrant as specified in charter)
Pennsylvania 1-7410 25-1233834
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
One Mellon Bank Center
500 Grant Street
Pittsburgh, Pennsylvania 15258
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code - (412) 234-5000
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ITEM 5. OTHER EVENTS
By press release dated July 24, 1998, Mellon Bank Corporation ("MBC"),
its subsidiary The Dreyfus Corporation and Newton Management Limited
("Newton") announced an agreement whereby Mellon will acquire a
majority interest in Newton.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit Description
Number
99.1 Mellon Bank Corporation Press Release, dated July 24, 1998, announcing
the matter referenced in Item 5 above.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MELLON BANK CORPORATION
Date: July 30, 1998 By: /s/ STEVEN G. ELLIOTT
Steven G. Elliott
Vice Chairman and Chief Financial
Officer
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EXHIBIT INDEX
Number Description Method of Filing
99.1 Press Release dated Filed herewith
July 24, 1998
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LOGO MELLON LOGO NEWTON LOGO DREYFUS
FOR IMMEDIATE RELEASE
MELLON TO ACQUIRE MAJORITY INTEREST IN NEWTON
Combines international investment expertise and global distribution capability
PITTSBURGH and LONDON, July 24, 1998--Mellon Bank Corporation (NYSE: MEL), its
subsidiary The Dreyfus Corporation and Newton Management Limited today announced
an agreement that will create a global asset management business with wide
international distribution capabilities and a broad range of domestic U.S., U.K.
and international investment products. Following the acquisition, Mellon will
own 75 percent of Newton outright with Newton management and staff retaining an
interest in 25 percent either directly or through options. The transaction
places an initial value on Newton of approximately $277* million ((Pounds)170
million). The initial consideration will be paid in cash and loan notes.
Mellon, a broad-based financial services company with a bank at its core,
is one of the largest U.S. banking groups in terms of market capitalization
(approximately $18.3 billion ((Pounds)11.2 billion) as of June 30, 1998).
Mellon, trading under the Dreyfus name in its investment management businesses,
ranks among the largest asset managers in the world with about $350 billion
((Pounds)215 billion) in assets under management among its 11 investment
management units. These businesses are leaders in the U.S. institutional,
retail mutual fund and high net worth markets.
Newton is a leading independent U.K.-based investment manager with funds
under management in excess of $20.4 billion ((Pounds)12.5 billion). With a
strong team of experienced international fund managers and global analysts, it
provides active international investment management to institutional, private
and retail clients. Newton offers both segregated portfolios and pooled funds
to the institutional market, discretionary management to private clients and a
range of U.K. unit trusts and Jersey-based offshore funds to a wide range of
U.K. and international investors.
Combined, Mellon and Newton will offer a comprehensive range of high-
quality investment products and services through an international distribution
network to meet the growing demand of investors worldwide.
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* (Pounds)1 = $1.63
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Mellon to Acquire Newton
July 24, 1998
Page 2
Newton is currently one-third owned by The Royal Bank of Scotland Group plc
and two-thirds owned by Newton management and staff. Following regulatory
approval, the transaction is expected to be completed later this year.
"This acquisition unites Mellon with a leading U.K. investment management
house with a strong reputation and international investment expertise," said
Frank V. Cahouet, Mellon chairman, president and chief executive officer.
"Mellon's strategy is to seek the highest quality partners around the world to
satisfy investors' rapidly growing demands for diversifying their investments
internationally. Newton is the cornerstone of this strategy."
Stewart W. Newton, chairman of Newton, said, "This merger is progressive.
All stakeholders will benefit; clients, staff and shareholders. Increased
distribution and enhanced global reach will allow investment to grow in all
aspects of the business and will provide an attractive environment to recruit
and keep high-quality people for the benefit of our clients. Moreover, clients
and staff will have the added security of an enlarged capital base."
"The critical point is that our investment philosophy and culture will be
preserved and the integrity and focus of our investment team will remain
undisturbed," said Charles B. S. Richardson, Newton's chief investment officer.
Newton will retain its name, and day-to-day management of the company will
remain with the Newton team. Stewart Newton, who founded Newton in 1977, will
continue as chairman, Colin R. Harris will be chief executive officer and
Charles Richardson will continue as chief investment officer. Ronald P.
O'Hanley, president of Boston-based Dreyfus Institutional Investors, Mellon's
institutional investment management businesses, and W. Keith Smith, Mellon
senior vice chairman, will become deputy chairmen of Newton.
The retail distribution agreement between Newton and The Royal Bank of
Scotland Group will remain in place. Newton will continue to provide The Royal
Bank of Scotland Group with investment products and administrative support for
distribution through The Royal Bank of Scotland Group's branch network.
Additionally, The Royal Bank of Scotland Group and Dreyfus intend to seek ways
to augment distribution further.
"This is a further positive step for the Bank and its customers," said Dr.
George R. Mathewson, chief executive of The Royal Bank of Scotland Group. "Our
relationship with Newton has been
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Mellon to Acquire Newton
July 24, 1998
Page 3
excellent since we became a shareholder in 1994. Newton provides our customers
with a range of high-quality investment products and we are delighted that our
link with them will continue following this sale. We welcome the investment by
Mellon, an organization for which we have considerable respect, and we look
forward to developing our relationship with them through their ownership of
Newton."
The acquisition of Newton is the largest in a series of international asset
management acquisitions, alliances and joint ventures Mellon has made over the
past year and a key link in Mellon's expansion of global asset management
capabilities. Through these agreements, Mellon has established its presence
globally in the asset management business in Japan, Hong Kong, Brazil, Chile and
now Europe, which builds upon its strong domestic base. Mellon recently expanded
its U.S. mutual fund business with the acquisition of Founders Asset Management,
Inc., a Denver-based manager of growth-oriented equity mutual funds and other
investment portfolios.
"The strategic fit between our companies makes this a compelling
partnership that will benefit both Newton's and Mellon's clients. Through
ongoing investment in Newton's research capabilities and by advancing its
technology and client service resources with Mellon's existing capabilities,
clients can look forward to an enhanced level of service. With its strong
investment reputation and extensive global research capability, Newton provides
us with a gateway to Europe and strengthens our position in Asia and Latin
America," said Christopher M. "Kip" Condron, Mellon Bank president and chief
operating officer.
Capitalizing on the strengths of the two organizations, Mellon and Newton
plan to develop in three growth areas: institutional asset management in Europe;
retail mutual funds in Europe and selected parts of Asia and Latin America; and
a global high net worth business. Both Mellon and Newton are leaders in these
businesses in their respective markets. Together, the combined entity will
possess powerful international capabilities.
"Increasing personal wealth and the reduction in government pensions is
driving the demand for international investment skills and diverse distribution
capabilities," said O'Hanley. "Newton is ideally positioned to meet this demand
throughout Europe, Asia and Latin America. We also see significant demand for
Newton's products in the United States, which we expect to distribute through
our Dreyfus investment units."
"This is a people business. We are all looking forward to working with
Mellon and Dreyfus to maximize the opportunities arising from the partnership,"
said Harris.
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Mellon to Acquire Newton
July 24, 1998
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A broad-based financial services company with a bank at its core, Mellon
ranks among the largest bank holding companies in market capitalization in the
United States. With about $350 billion ((Pounds)215 billion) of assets under
management under the Dreyfus name and nearly $1.7 trillion (just over (Pounds)1
trillion) of assets under administration, Mellon provides a full range of
banking, investment and trust products and services to individuals and small,
midsize and large businesses and institutions. Its mutual fund companies, The
Dreyfus Corporation and Founders Asset Management, place Mellon as the leading
bank manager of mutual funds in the world. Headquartered in Pittsburgh, Mellon's
principal subsidiary is Mellon Bank, N.A.
A leading independent U.K.-based investment management firm with in excess
of $20.4 billion ((Pounds)12.5 billion) under management, Newton focuses its
investment activities on institutional, retail and personal investment clients.
Newton employs 483 people worldwide.
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FOR FURTHER PRESS INFORMATION, PLEASE CONTACT:
Mellon
Media: Steve Dishart (011 44 171) 332-5535
Ron Gruendl (412) 234-7157
Patrice Kozlowski (Dreyfus) (212) 922-6030
Vin Loporchio (The Boston Co.) (617) 722-7571
Analysts: Don MacLeod (412) 234-5601
Newton
Colin Harris, Jonathan Powell (011 44 171) 332-5535
William Clutterbuck (The Maitland Consultancy) (011 44 171) 379-5151
The Royal Bank of Scotland Group
David Appleton (011 44 131) 523-4414
