|
||||||||
  |
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||
AIB sells scandal-hit Allfirst
LONDON, England -- Allied Irish Banks has agreed to sell its troubled U.S. subsidiary, Allfirst Financial, to M&T Bank Corp. in a deal valued at $3.1 billion. The deal, coming seven months after Allfirst was engulfed by a trading scandal, gives Dublin-based AIB a 22.5 percent stake in M&T -- whose largest investor is Warren Buffet's Berkshire Hathaway Inc. -- plus $886 million in cash. AIB will also be given seats on the board of M&T, which is based in Buffalo, New York. The combined company would be one the biggest in the northeast region of the U.S., with assets estimated at more than $48 billion. Allfirst has 262 branches from Northern Virginia to Pennsylvania, while M&T has about 451 branches stretching south from New York to West Virginia.
The deal would also allow AIB -- which purchased Allfirst in the 1980s when it was known as First Maryland Bancorp -- to maintain a presence in the huge U.S. market. The company said the merger would result in cost savings of $100 million this year and $60 million in 2003. Michael Buckley, AIB's chief executive, said in a statement that the partnership is "an ideal opportunity for us to reposition and strengthen our involvement in U.S. regional banking."
There has been growing speculation that AIB was looking to sell the Baltimore-based Allfirst, after revelations in February that one of its foreign exchange dealers, John Rusnak, had racked up nearly $700 million in unauthorized losses. An internal probe placed some of the blame for the alleged fraud on poor management supervision and inadequate financial controls. Rusnak is scheduled to go on trial for fraud charges in February. All first chairman Frank Bramble and Chief Executive Susan Keating resigned earlier this year. AIB (ALBK) shares were up 11.6 percent to 12.81 euros in early afternoon trading on Thursday.
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
