WASHINGTON -- The Justice Department approved on Friday the $57.3 billion merger of NationsBank with BankAmerica into the nation's first coast-to-coast bank after the companies agreed to sell off 17 New Mexico branch offices.
The banks won approval for the megamerger that will create the nation's largest bank with 4,900 branches and 15,000 automated teller machines branches in 22 states.
BankAmerica's New Mexico branches, which the banks agreed to sell, have total deposits of $491.6 million, the Justice Department said. Its antitrust division insisted on the divestiture out of concern the deal would reduce competition in New Mexico.
NationsBank, based in Charlotte, N.C., has its strength across the nation's south and midsection. BankAmerica spreads east from its San Francisco base. The combined bank will take the BankAmerica name but have its headquarters in Charlotte.
The BankAmerica-NationsBank merger would be the second-largest corporate marriage ever behind the planned $69.9 billion Citicorp-Travelers combination, to be called Citigroup. BankAmerica and NationsBank would have $570 billion in combined assets, surpassing Chase Manhattan Corp. as the biggest U.S. bank.
"Our investigation of bank mergers generally indicates that the area of competitive concern is loans to small and medium-sized businesses," said Assistant Attorney General Joel I. Klein, head of the antitrust division. "This settlement preserves the competitive choice for small businesses and other consumers in New Mexico, who would have been harmed by this merger. Those consumers will continue to enjoy the most competitive loan rates and the best banking services."
The agreement calls for selling 15 BankAmerica branches in Albuquerque, one in Clovis and one in McKinley.
NationsBank also agreed that it would not try to keep other financial institutions from leasing or purchasing any bank branches it may close in merger-related consolidation. Subject to regulatory approvals, the 17 branches along with their loans and deposits will be sold to a competitor.
The merger also needs approval from the Board of Governors of the Federal Reserve System. But Justice said it would advise the Fed that, with the divestiture, the antitrust division would not challenge the deal.
The New Mexico and Texas attorney general's offices participated in the Justice Department investigation of the deal.
NationsBank has 3,214 offices with total assets of $311 billion and total deposits of $174 billion.
BankAmerica Corp., headquartered in San Francisco, has 1,798 offices and total assets of $265 billion and total deposits of $174 billion.