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BNY Mellon Approaches Northern Trust to Discuss Potential Merger
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Key Takeaways
BK and NTRS held early merger talks, though no specific terms or offers were discussed.
BNY Mellon aims to scale through global moves like its Archer buy and Saudi Arabia expansion.
A merger would create over $3T in AUM, enhancing BK's position among global asset managers.
Last week, The Bank of New York Mellon Corp. (BK - Free Report) reached out to Northern Trust Corp. (NTRS - Free Report) , signaling interest in merging with the smaller rival. This was reported by the Wall Street Journal, citing people familiar with the matter.
Top executives of BNY Mellon and Northern Trust engaged in at least one conversation, though the firms didn’t discuss any particular offer.
Per WSJ news, BK is likely to approach NTRS with a formal bid in the future; however, it is unlikely to result in a deal.
Rationale Behind BNY Mellon’s Move
BNY Mellon has been engaged in expansion efforts to strengthen its market share domestically as well as globally. Last month, it obtained a license to set up a regional headquarters in Saudi Arabia. In November 2024, the company acquired Archer to enhance its managed account offerings.
Further, as regulators seek to ease norms for mega bank mergers, it provides another opportunity for BNY Mellon to merge and scale its operations.
BNY Mellon and Northern Trust offer similar services, including custody of client assets, wealth and asset management, and other banking business. The potential merger would significantly boost the scale of operations with an asset under management of more than $3 trillion, allowing BK to compete with other global asset managers.
BK’s Price Performance & Zacks Rank
Over the past six months, BK shares have risen 17.4% against the industry’s decline of 4.3%.
Earlier this month, Commerce Bancshares, Inc. (CBSH - Free Report) agreed to acquire FineMark Holdings in an all-stock transaction valued at $585 million. The closing of the deal, expected on January 1, 2026, is subject to regulatory approval, approval of FineMark shareholders and other customary closing conditions.
The transaction is expected to be 6% accretive to CBSH’s 2026 GAAP earnings, with fully phased cost savings. Cost savings of 15% of FineMark’s non-interest expenses are expected.
Similarly, last month, Capital One (COF - Free Report) acquired Discover Financial Services. The $35-billion transaction reshapes the landscape of the credit card industry, creating a behemoth (in terms of loan volume).
At the time of the announcement (February 2024), it was noted that the Capital One-Discover merger will likely generate and deliver attractive accretion and returns for shareholders. Expense synergies of $1.5 billion in 2027, coupled with network synergies of $1.2 billion, underscore the value-creation potential of the merger. The transaction will result in a more than 15% accretion to adjusted non-GAAP EPS by 2027.
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BNY Mellon Approaches Northern Trust to Discuss Potential Merger
Key Takeaways
Last week, The Bank of New York Mellon Corp. (BK - Free Report) reached out to Northern Trust Corp. (NTRS - Free Report) , signaling interest in merging with the smaller rival. This was reported by the Wall Street Journal, citing people familiar with the matter.
Top executives of BNY Mellon and Northern Trust engaged in at least one conversation, though the firms didn’t discuss any particular offer.
Per WSJ news, BK is likely to approach NTRS with a formal bid in the future; however, it is unlikely to result in a deal.
Rationale Behind BNY Mellon’s Move
BNY Mellon has been engaged in expansion efforts to strengthen its market share domestically as well as globally. Last month, it obtained a license to set up a regional headquarters in Saudi Arabia. In November 2024, the company acquired Archer to enhance its managed account offerings.
Further, as regulators seek to ease norms for mega bank mergers, it provides another opportunity for BNY Mellon to merge and scale its operations.
BNY Mellon and Northern Trust offer similar services, including custody of client assets, wealth and asset management, and other banking business. The potential merger would significantly boost the scale of operations with an asset under management of more than $3 trillion, allowing BK to compete with other global asset managers.
BK’s Price Performance & Zacks Rank
Over the past six months, BK shares have risen 17.4% against the industry’s decline of 4.3%.
Image Source: Zacks Investment Research
Currently, BNY Mellon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Acquisitions Pursued by Other Finance Firms
Earlier this month, Commerce Bancshares, Inc. (CBSH - Free Report) agreed to acquire FineMark Holdings in an all-stock transaction valued at $585 million. The closing of the deal, expected on January 1, 2026, is subject to regulatory approval, approval of FineMark shareholders and other customary closing conditions.
The transaction is expected to be 6% accretive to CBSH’s 2026 GAAP earnings, with fully phased cost savings. Cost savings of 15% of FineMark’s non-interest expenses are expected.
Similarly, last month, Capital One (COF - Free Report) acquired Discover Financial Services. The $35-billion transaction reshapes the landscape of the credit card industry, creating a behemoth (in terms of loan volume).
At the time of the announcement (February 2024), it was noted that the Capital One-Discover merger will likely generate and deliver attractive accretion and returns for shareholders. Expense synergies of $1.5 billion in 2027, coupled with network synergies of $1.2 billion, underscore the value-creation potential of the merger. The transaction will result in a more than 15% accretion to adjusted non-GAAP EPS by 2027.