Mr Sandy Warner, JP Morgan's chairman and chief executive, yesterday accepted that the 140-year-old firm was too small to compete on Wall Street as he confirmed a $34.4 billion (€40.01 billion) takeover by Chase Manhattan.
Looking tense and tired, Mr Warner said JP Morgan, once the most prestigious financial powerhouse in the US, had "a ton of content and not enough clients". He added that Chase "has got a ton of clients and not enough product".
The day, Mr Warner said, was "momentous". "This is a story about growth," he said. "It's really that simple."
Mr William Harrison, Chase's chairman and chief executive officer, said the combined entity had all the tools it needed to become one of a handful of firms that would emerge as "end-game winners" in financial services.
"We do not have to do another major acquisition," said Mr Harrison. "I won't have to answer questions 18 times a day about when are you going to do a big deal. This is it."
The leaders of Chase the US commercial banking giant formed by previous mergers of Chase, Chemical and Manufacturers Hanover, and JP Morgan stressed that the combination made sense in terms of social compatibility.
But they acknowledged that, in one crucial aspect - becoming a world-class equities underwriter - the deal would take time to prove itself.
Investors appeared to be questioning the deal that united two of the most storied names in US finance. By midday, Chase shares were down $6.13, or 10.93 per cent, to $49.94.
Mr Warner (54), will become chairman of the new JP Morgan Chase & Co, while Mr Harrison (57), will be chief executive.
To justify the high price being paid for JP Morgan, the merger will have to produce $1.9 billion in pre-tax synergies, including $1.5 billion in cost cuts and another $400 million in increased revenues.
