NEW YORK, Dec 4: The oldest US bank, The Bank of New York, has agreed to purchase Mellon Financial for $16.5 billion in a bid to create one of the world's largest global asset managers.The new firm, which will be called The Bank of New York Mellon Corporation, will rank among the top 10 global asset managers with over $1 trillion in assets under management, according to a joint statement from the two banks.

The merger will also create “the world's leading asset services” with $16.6 trillion in assets under management and $8 trillion of corporate funds under trusteeship.

“We are creating one of the world's leading financial services companies,” said Bank of New York chairman and chief executive Thomas Renyi, who will serve as executive chairman of the newly formed group for 18 months after the deal's completion.Robert Kelly, Mellon's chairman, will become the chief executive of the new group and succeed Renyi as chairman of the board.

Under the terms of the deal, Bank of New York shareholders will receive 0.9434 shares in the new company for each Bank of New York share they hold.

Mellon shareholders will gain one share in the new company for each of their Mellon shares.

Executives hope to close the deal by the third quarter of 2007, subject to regulatory and shareholder approvals.

Almost a quarter of the new group's revenues are expected to be derived internationally. Its current combined revenues are over $12 billion.

The companies' combined headcount of 40,000 staff is likely to be reduced by 3,900 through to 2010 following the deal's closure, the banks said. The Bank of New York markets an array of financial services for institutions and individuals. —AFP