Housing Administration (“FHA”) and Veterans Administration (“VA”) for US Federal Reserve: 19990907

For immediate release September 7, 1999The Federal Reserve Board today announced its approval of theproposal of Fleet Financial Group, Inc., to acquire BankBoston Corporation, both of Boston, Massachusetts, and its banking and nonbanking subsidiaries. The combinedorganization will be the largest banking institution in the northeastern United States.To address competitive concerns arising from the proposal, Fleet is required todivest more than 300 branches, controlling total deposits of more than $13 billion,located in Massachusetts, Connecticut, New Hampshire, and Rhode Island. This isthe largest divestiture ever to take place in connection with a banking combination.Attached is the Board's Order relating to this action.Attachment

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FEDERAL RESERVE SYSTEMFleet Financial Group, Inc.Boston, MassachusettsBankBoston CorporationBoston, MassachusettsOrder Approving the Merger of Bank Holding CompaniesFleet Financial Group, Inc. (“Fleet”), a bank holding company withinthe meaning of the Bank Holding Company Act (“BHC Act”), has requested theBoard’s approval under section 3 of the BHC Act (12 U.S.C. § 1842) to merge withBankBoston Corporation (“BankBoston”) and thereby acquire BankBoston’ssubsidiary banks, including its lead subsidiary bank, BankBoston, N.A., Boston,Massachusetts.1 Fleet also has requested the Board’s approval under section4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.24 of the Board’sRegulation Y (12 C.F.R. 225.24) to acquire the domestic nonbanking subsidiaries of BankBoston.2 In addition, Fleet has filed applications and notices under section4(c)(13) of the BHC Act(12 U.S.C. § 1843(c)(13)), sections 25 and 25A of the Federal Reserve Act (12U.S.C. §§ 601 et seq

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and 611 et seq

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), and the Board’s Regulation K (12 C.F.R.211) to acquire the foreign operations and Edge Act subsidiaries of BankBoston.31 Fleet also would acquire BankBoston’s other subsidiary banks: BankBoston of Florida, N.A., Boca Raton, Florida; and BankBoston Maine, N.A., Portland, Maine.2 The nonbanking activities of BankBoston for which Fleet has sought approvalunder section 4 of the BHC Act and the subsidiaries engaged in these activities arelisted in Appendix A.3 Fleet and BankBoston also have requested the Board’s approval to hold andexercise stock purchase options that allow Fleet to purchase up to 19.9 percent of

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Fleet, with total consolidated assets of approximately$104.4 billion, is the ninth largest commercial banking organization in the UnitedStates, controlling approximately 2.5 percent of total banking assets of insuredcommercial banks in the United States (“total banking assets”).4 Fleet operatesdepository institutions in Connecticut, Florida, Maine, Massachusetts, NewHampshire, New Jersey, New York, and Rhode Island. Fleet also engages in abroad range of permissible nonbanking activities nationwide.BankBoston, with total consolidated assets of approximately $73.5billion, is the 15th largest commercial banking organization in the United States,controlling approximately 1 percent of total banking assets. BankBoston operatessubsidiary banks in Connecticut, Florida, Maine, Massachusetts, New Hampshire,and Rhode Island. BankBoston also engages nationwide in numerous permissiblenonbanking activities.As discussed more fully below, Fleet has proposed to divest branchescontrolling more than $13 billion in deposits and associated assets in connectionwith the proposal to address the potential effects of the proposal on competition invarious markets in Massachusetts, Connecticut, and Rhode Island. After accountingfor the proposed divestitures, the proposal would create a combined organizationthat would be the eighth largest commercial banking organization in the UnitedStates, with total consolidated assets of approximately $164.9 billion, representingapproximately 3.5 percent of total banking assets. The combined organizationwould operate under the name Fleet Boston Corporation (“Fleet Boston”), andwould have a significant presence in the northeastern United States.

BankBoston’s common stock and BankBoston to purchase up to 19.9 percent of Fleet’s common stock if certain events occur. Fleet and BankBoston would notexercise these options if the merger is consummated.4 Asset data and rankings are as of December 31, 1998.

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