DAVID HAFFENREFFER, CNN ANCHOR: Well, Chase Manhattan Bank is expected to announce this morning that it is acquiring J.P. Morgan in a deal uniting two of the oldest names on Wall Street. Published reports say the prices is worth roughly $36 billion in stock. Shares of J.P. Morgan are up $7 in the pre-market today. They've soared in recent weeks on rumors of a buyout to end the 150-year-old independence of J.P. Morgan. Allan Chernoff has more now on the possible combination and what it means in this rapidly consolidating industry.</s>ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): Late Tuesday, neither Chase Manhattan nor J.P. Morgan would comment, but Wall Street was expecting an announcement as early as Wednesday morning.</s>ANDY COLLINS, ING BARINGS: It's going to be by far the biggest acquisition of an investment bank, at anywhere between $30 and $40 billion; it will dwarf the next closest in size, which is $12 1/2 billion, UBS's acquisition of PaineWebber.</s>CHERNOFF: The point of merging would be to turn two big banks into a giant, to compete in what is becoming a world of financial behemoths. Some analysts say being bigger would help both companies, but Chase and Morgan are historically commercial banks, a combination would still fall short of the top tier of lucrative investment banking. In equity underwriting, J.P. Morgan currently is ranked number six, Chase is number 11; together they'd still be in the number six slot. And in deal-making, mergers and acquisitions, the same story: number eight Chase combined with number 11 J.P. Morgan would rank only seventh, a level Chase would achieve anyway with a pending combination of CS First Boston and Donaldson, Lufkin, Jenrette. In fact, some analysts argue a combination could seriously dilute Chase Manhattan's earnings next year, even if the companies were to chop expenses. Allan Chernoff, CNN Financial News, New York.
Chase Manhattan Bank Expected to Announce Acquisition of J.P. Morgan