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Ahmanson makes mega-deal
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March 17, 1998: 10:24 a.m. ET
Washington Mutual buys rival for $10B, creating financial powerhouse
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NEW YORK (CNNfn) - H.F. Ahmanson & Co. decided Tuesday that if you can't beat 'em, join 'em as it announced it would merge with rival Washington Mutual Inc. for $9.9 billion.
The merger creates the nation's 7th largest banking company based on total 1997 year-end assets of nearly $150 billion.
Under Tuesday's agreement, Washington Mutual will exchange 1.12 shares of its stock (WAMU) for each share of Ahmanson (AHM). That values Ahmanson at about 80-3/8 per share, a premium over its Monday closing price of 65-1/2.
The two West Coast companies battled it out last summer over Great Western Financial Corp. Ahmanson attempted to buy Great Western for $6.87 billion, but Washington Mutual emerged as a white knight with a winning offer of $6.94 billion.
The Irwindale, Calif.-based Ahmanson is a savings and loan holding company whose stronghold is in California, but also has interests in Texas, Florida and Arizona.
Washington Mutual, based in Seattle, is the largest thrift in the country and is predominantly present in the western United States. The company will take a merger-related charge of $370 million.
Together, the two will have nearly $86.3 billion in deposits and serve about 6 million households through 2,000 branches. They will have a 17 percent market share in California.
The boards of both companies have approved the deal and the transaction now awaits shareholder and regulatory review. Washington Mutual and Ahmanson expect the deal to be completed late in the third quarter.
While the deal will create a financial powerhouse, it may create some worries among the companies' work force.
A Washington Mutual spokesman said the company expects 3,000 to 3,500 positions to be "consolidated" as a result of the merger. He said the exact number was not known since some employees may find work in other parts of the company. 
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