Terms of the DLJ Deal
As expected, Swiss banking giant Credit Suisse Group announced Wednesday it is buying U.S. brokerage Donaldson, Lufkin & Jenrette Inc. Highlights of the deal:
* Credit Suisse will pay $90 a share for DLJ, including cash and stock. The deal’s value: about $11.5 billion. DLJ stock jumped $4.25 to $88.25 on the news, on the NYSE.
* French financial services firm AXA, which holds 71% of DLJ, will tender its entire stake to Credit Suisse. AXA will be paid 30% in cash and 70% in Credit Suisse stock.
* The combined investment banking firms of DLJ and Credit Suisse First Boston will operate under the latter’s name. Joe L. Roby, DLJ chief executive, will be chairman of the combined firm’s executive board; CSFB Chief Executive Allen D. Wheat will be chief executive and president.
* The combined firm will have more than 26,500 employees and assets in excess of $600 billion. But analysts predicted up to 10% of the work force could be cut. Credit Suisse said annual pretax cost savings from the transaction will be $750 million to $1 billion by 2002. It will take a restructuring charge of about $850 million this year to reflect the deal.
* Credit Suisse will offer options to DLJ employees in exchange for options they own in the firm and will fund a “retention plan” amounting to $1.2 billion.
Sources: Associated Press, Bloomberg News
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