But some analysts were expecting that the deal announced Sunday would bring a better takeover price for BankBoston (BKB) shareholders. Terms calls for BankBoston shareholders to receive 1.1844 shares of Fleet (FLT) for each BankBoston share, or $53 a share - a 13 percent premium over Friday's close.
BankBoston shares closed up 1 1/16 to 46 15/16 ahead of the news on Friday, while Fleet shares edged up 1/8 to 44 3/4.
"We were hoping for a takeover price of $60 a share for BankBoston," said Michael L. Mayo, CS First Boston analyst in a note to investors early Monday.
"It seems that in return for a lower price for shareholders, BankBoston is helping some of its management, employees and local constituencies, such as by increasing the chance that there will be a surviving Boston- based bank."
The deal will create the nation's eight-largest bank and will be named Fleet Boston, initially be headed by Fleet chief executive officer Terrence Murray.
After two years, Murray, 59, will step down as chief executive but stay on as chairman, succeeded as CEO by current BankBoston chief executive Charles K. "Chad" Gifford, 56. The following year, Gifford will also take over as chairman.
The deal would be the latest in a number of combinations between global banks that have occurred over the past year. Recent deals include the merger between Citicorp and Travelers Group Inc. to form Citigroup, the country's largest bank, and the purchase of NationsBank Corp. by BankAmerica Corp. to form the country's second-largest bank.
A combined Fleet-BankBoston, with assets of about $180 billion, would surpass eighth-largest Bankers Trust Corp, which itself is in the process of being acquired by German bank Deutsche Bank AG.
Any kind of deal would likely require each bank to make significant divestitures to comply with antitrust law.
Fleet has about $104 billion in assets and non-banking businesses that include credit cards, discount and on-line stock brokerages, asset management and market-making operations.
BankBoston has $74 billion in assets and recently expanded its investment banking division, purchasing San Francisco-based Robertson Stephens last year for $800 million.
BankBoston stock prices have suffered over the past several months because of uncertainty over earnings in Latin America, where it obtains one-fifth of its revenues.
Written By Emily Church, CBS MarketWatch