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News > Deals
WAMU in Fleet unit buy
April 2, 2001: 6:42 p.m. ET

With $660M cash purchase of Fleet unit, WAMU is No. 2 mortgage firm
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NEW YORK (CNNfn) - Washington Mutual Inc. agreed Monday to acquire the mortgage unit of FleetBoston Financial Corp. for about $660 million cash, making Washington Mutual the nation's No. 2 mortgage-servicing business.

Seattle-based Washington Mutual (WM: Research, Estimates), the nation's largest thrift, paid a $60 million premium to Fleet Mortgage Corp.'s equity book value of $600 million at year-end 2000. The boards of both companies have approved the transaction, which is anticipated to close in second quarter 2001, subject to regulatory approval.

graphicThe transaction is expected to add modestly to Washington Mutual's earnings per share. Washington Mutual expects annual cost savings of about 30 percent of the acquired Fleet Mortgage expense base, the company said in a statement.

Boston-based Fleet (FBF: Research, Estimates) expects to record a one-time after-tax loss of about $200 million in first quarter related to the sale of mortgage unit. The mortgage unit accounted for about 2 percent of Fleet's consolidated earnings.

The Fleet mortgage purchase follows a deal in October when Washington Mutual agreed to buy PNC Financial Services Group Inc.'s residential mortgage business for $605 million cash, at that point making it the third-largest mortgage lender in the nation.

Columbia, S.C.-based Fleet Mortgage originates residential mortgage loans. The unit had $129.2 billion in loan servicing at year-end 2000 and is expected to boost Washington Mutual's residential mortgage-servicing portfolio to $451.5 billion. The addition of Fleet Mortgage, which employs about 2,500 employees, would make Washington Mutual the nation's second-largest mortgage-servicing business.

Morgan Stanley advised Washington Mutual while Cohane Rafferty Securities LLC served as financial advisor for Fleet.

Shares for Fleet gained 15 cents to $37.90 while Washington Mutual fell 42 cents to $54.33 Monday. graphic





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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.