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): February 21, 1995
SHAWMUT NATIONAL CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 1-10102 06-1212629
(State or Other (Commission File (IRS Employer
Jurisdiction of Number) Identification No.)
Incorporation)
777 Main Street, Hartford, Connecticut 06115
One Federal Street, Boston, Massachusetts 02211
(Address of principal executive offices) (Zip Codes)
(203) 986-2000
Registrant's telephone numbers, including area codes: (617) 292-2000
Not Applicable
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
Pursuant to Form 8-K, General Instructions F, Shawmut National
Corporation hereby incorporates by reference the press releases
attached hereto as Exhibits 99.1 and 99.2.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS.
(c) The following exhibits are filed with this
Current Report on Form 8-K:
EXHIBIT
NUMBER DESCRIPTION
99.1 Press Release, dated February 21, 1995,
entitled "Fleet and Shawmut Agree to
Strategic Merger in $3.7 Billion
Transaction."
99.2 Press Release, dated February 22, 1995,
entitled "Shawmut National Corporation --
Suspension of Dividend Reinvestment and Stock
Purchase Plan."
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 hereunto duly
authorized.
SHAWMUT NATIONAL CORPORATION
By: /s/ Joel B. Alvord
_______________________________
Joel B. Alvord
Chairman and Chief Executive Officer
Dated: February 23, 1995
EXHIBIT INDEX
Exhibit Page
Number Description Number
99.1 Press Release, dated February 21, 1995,
entitled "Fleet and Shawmut Agree to
Strategic Merger in $3.7 Billion
Transaction."
99.2 Press Release, dated February 22, 1995,
entitled "Shawmut National Corporation -
- Suspension of Dividend Reinvestment
and Stock Purchase Plan."
Exhibit 99.1
FLEET AND SHAWMUT AGREE TO STRATEGIC MERGER
IN $3.7 BILLION TRANSACTION
Combination Reinforces Leadership Position in New England
and Creates One of Top 10 Banks in the United States
Boston, February 21, 1995 - Fleet Financial Group (NYSE:FLT) and
Shawmut National Corporation (NYSE:SNC) today announced they have
signed a definitive agreement for a strategic merger that will create
one of the country's top 10 banks and the only one headquartered in
New England. The combined institution will have more than $80 billion
in assets, $50 billion in deposits, number-one market positions in
Connecticut, Maine, Massachusetts, New Hampshire and Rhode Island and
substantial financial services businesses across the country.
The merged organization will be called Fleet Financial Group and
will be headquartered in Boston. Terrence Murray, 55, Chairman and
Chief Executive Officer of Fleet will be President and Chief Executive
Officer of the new Fleet. Joel B. Alvord, 56, Chairman and Chief
Executive Officer of Shawmut, will be Chairman of the new Fleet.
Murray will also assume the Chairman title when Alvord reaches age 60
in 1998. Murray and Alvord will be joined on the board of directors
of the new Fleet by 18 outside directors, 11 from Fleet and seven from
Shawmut.
The merger agreement, which was unanimously approved yesterday by
the boards of directors of both institutions, provides that each share
of Shawmut common stock would be exchanged for 0.8922 newly issued
shares of Fleet common stock on a tax-free basis. Based on Friday's
closing price of Fleet stock of $33.625 per share, and Shawmut's stock
price of $20.625, the transaction would be valued at approximately
$3.7 billion, or $30 per Shawmut share, representing a premium to
Shawmut shareholders of approximately 45%. The merger is expected to
be completed in the fourth quarter of 1995 and is subject to approval
by federal and state bank regulators and the shareholders of both
companies.
Shawmut currently pays a quarterly cash dividend of $0.22 per
share. Fleet currently pays a quarterly cash dividend of $0.40 per
share, which will be the continuing dividend of the combined company.
Fleet's functional organization will reflect its strong
commitment to the entire region. The consumer banking business, with
deposits of over $50 billion, the sixth largest branch network in the
U.S. and the nation's third largest small business loan portfolio, will
be operated from Hartford. The commercial banking business, including
the 10th largest commercial and industrial loan portfolio in the U.S.,
will be operated from Providence. Also in Providence will be the
nationwide financial services division. Substantial businesses,
including tax and student loan processing, will continue to be
operated from upstate New York.
"Shawmut and Fleet are ideal strategic partners because of the
superb fit between our two companies," said Murray, who will be based
in Boston. "Both are uniquely committed to the Northeast and the
financial needs of its people and businesses. This merger is a
logical step in our long histories as New England-based companies.
The combined entity will be a financial powerhouse with critical mass,
a broader mix of products and services and an expanded customer base."
"Merging with Fleet is the right thing to do for Shawmut
shareholders, employees and customers, and it is also good for the
region," said Alvord, who is based in Boston. "Together, we can build
the preeminent financial institution and create a bright future for
all of our constituencies. As the nationwide consolidation of the
financial services industry accelerates, New England will benefit
because two strong local banking organizations are taking control of
their own destiny to create a powerful customer-driven institution."
In addition to creating many growth opportunities, the merger
will also generate substantial cost savings. By consolidating work
forces, facilities, and operations areas while eliminating redundant
costs, Fleet expects to increase efficiency and reduce expenses by
approximately $400 million per year, or 14% of combined non-interest
expenses, when the consolidation is complete.
A net reduction of just under 10% of the combined work force, or
approximately 3,000 employees, is anticipated. Both organizations
have initiated hiring freezes in order to minimize the number of
affected employees. Severance packages and complacement services will
be offered to assist those employees.
Fleet expects to have in excess of 900 branches after
consolidations, closings, and anticipated regulatory divestitures.
Cost reductions and branch consolidations will come from both
companies and will be spread throughout the region. Fleet and Shawmut
expect to take restructuring charges totaling up to $400 million to
cover expenses related to these actions.
In addition to Murray and Alvord, the Fleet senior management
team will include the following: Robert J Higgins, 49, of Fleet will
be a Vice Chairman with responsibility for commercial banking; Gunnar
S. Overstrom, Jr., 52, of Shawmut will be a Vice Chairman with
responsibility for consumer banking/small business lending and
investment services; H. Jay Sarles 49, of Fleet will be a Vice
Chairman with responsibility for staff functions and corporate
strategy; Michael R. Zucchini, 48, of Fleet will be a Vice Chairman
with responsibility for the financial services division, consisting of
national consumer and fee-based businesses, and technology operations,
Eugene M. McQuade, 46, of Fleet will be Executive Vice President and
Chief Financial Officer; and David L. Eyles 55, of Shawmut will be
Executive Vice President and Chief Credit Policy Officer.
Fleet will be one of the largest companies in New England and a
major source of employment, tax revenues and community involvement.
Fleet will remain committed to serving the credit needs of low-to-
moderate income residents of all its communities. "Both banks have
worked closely with local leaders to develop their CRA programs, and
we look forward to continuing to work with them," said Murray.
The new Fleet Financial Group is a national, diversified
financial services company, providing superior consumer, commercial,
government banking, small business lending, specialized lending and
investment management services.
# # #
THE NEW FLEET FACT SHEET
($ in billions, except per share items)
December 31, 1994
FLEET SHAWMUT PRO FORMA
Total Assets $49.0 $32.4 $81.4
Net Loans $27.5 $18.7 $46.2
Total Deposits $34.8 $20.0 $54.8
Common Equity $3.2 $2.0 $5.2
Total Equity $3.6 $2.2 $5.8
Common Equity/Assets 6.5% 6.2% 6.4%
Tangible Common/Assets 5.9% 5.8% 5.8%
Tier 1 Leverage Ratio 6.7% 6.6% 6.6%
Reserves $0.95 $0.54 $1.50
Reserves/NPLs 216% 242% 225%
Fully Diluted
Common Shares 161.5 121.6 272.8
Book Value per Share $22.23 $16.72 $21.44
Closing Price $33.63 $20.63 $33.63
(21/17/95)
Market Capitalization $ 5.4 $ 2.5 $ 9.2
FLEET AT A GLANCE
(The New Entity)
This historic combination creates the only top 10 bank in the country
headquartered in New England. Fleet is well-positioned for the
future, with over $80 billion in assets, $50 billion in deposits and
$42 billion in assets under management. The merger will help New
England control its own economic destiny as the nationwide
consolidation in financial services accelerates.
Fleet is ...
... headquartered in Boston
... the leader in virtually every business category in the region
#1 - Consumer Deposits
#1 - Consumer Loans
#1 - Private Banking
#1 - Personal Trust
#1 - Middle Market Lending
#1 - Cash Management
#1 - Branch and ATM Network
#1 - Governmental Banking
... one of the nation's preeminent financial services institutions
#1 - Third-party student loan servicer
#2 - Mortgage banking company
#3 - Small business loan portfolio
#6 - Retail branch network
#10 - Commercial loan portfolio
... dedicated to a long-term partnership with its communities
- Lines of business operate from Boston, Providence, Hartford
and New York State.
- Combined $9 billion commitment in loans, products and
community initiatives to low-to-moderate income borrowers.
Management Structure
Terrence Murray - President and Chief Executive Officer
Joel B. Alvord - Chairman
Robert J. Higgins - Vice Chairman (commercial banking)
Gunnar S. Overstrom, Jr.- Vice Chairman (consumer banking/small
business and investment services)
H. Jay Sarles - Vice Chairman (staff functions and
corporate strategy)
Michael R. Zucchini - Vice Chairman (financial services, fee-
based businesses and technology operations)
Eugene M. McQuade - Executive Vice President and Chief
Financial Officer
David L. Eyles - Executive Vice President and Chief Credit
Policy Officer
Exhibit 99.2
SHAWMUT NATIONAL [Trademark Logo Depicting Chief Obbatinewat]
CORPORATION
777 Main Street
Hartford, Connecticut 06115
Contact: Vincent Loporchio One Federal Street
(617) 292-3239 Boston, Massachusetts 02211
FOR IMMEDIATE RELEASE
SHAWMUT NATIONAL CORPORATION
SUSPENSION OF DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
Boston, MASS. and Hartford, CONN., February 22, 1995 - Shawmut
National Corporation (NYSE: SNC) announced that, in light of its
previously announced agreement of merger with Fleet Financial Group,
Inc., Shawmut has suspended its dividend reinvestment and stock
purchase plan, effective February 20, 1995, the date of the merger
agreement, until further notice.
