JPMorgan Chase & Co. (JPM) is a global financial services holding company and the largest U.S. bank by total assets. The company traces its origins back as far as 1799, when The Manhattan Co. was founded in New York City. The bank's current form is built on the foundations of more than 1,200 predecessor institutions, including J.P. Morgan & Co., The Chase Manhattan Bank, Bank One, and many others. Today, JPMorgan provides consumer banking, investment banking, commercial banking, asset management, and other services. It operates through five separate business segments, including Consumer & Community Banking; Corporate & Investment Bank; Commercial Banking, Asset & Wealth Management; and Corporate. In 2019, the firm generated $36.4 billion in net income on $115.6 billion in net revenue. Its market cap is $366.8 billion, as of December 15, 2020.
More than two hundred years after the founding of The Manhattan Co., JPMorgan continues to evolve and expand. Its current name is the result of a merger between two banks in 2000. Acquisitions over the next decade added to the bank's total assets, helping to make it the largest commercial bank in America. Some of those acquisitions took place in the midst of the 2007-2008 financial crisis. At the prodding of the U.S. government, JPMorgan executed two major acquisitions during that period to help the U.S financial industry avoid a system-wide collapse. Others have helped to expand the bank's global operations.
Below, we look in more detail at 5 of JPMorgan’s most important acquisitions. The company does not provide a breakdown of how much profit or revenue that each acquisition currently contributes.
JPMorgan & Co. Inc. / The Chase Manhattan Corp.
- Type of Business: Banking and Financial Services
- Acquisition Price: $30.9 to $38.58 billion
- Acquisition Date: September 13, 2000 (announced)
The bank’s current name of JPMorgan Chase & Co. originated in a merger between JPMorgan & Co. Inc. and The Chase Manhattan Corp. in 2000. JPMorgan & Co. was first founded in New York in 1871. The Chase Manhattan Corp. traces its origins back to Chase National Bank, which was first established in Manhattan in 1877. Published estimates of the dollar value of the merger range from $30.9 billion to $38.58 billion. The merger, nonetheless, resulted in a company with total assets of about $660 billion, making it the third-largest U.S. bank behind Citigroup Inc. (C), with $800 billion, and Bank of America Corp. (BAC), with $680 billion. The deal also linked Chase’s syndicated-lending franchise and venture-capital division with JPMorgan Chase’s profitable private-banking division with $400 billion in assets under management (AUM). Since that time, JPMorgan Chase & Co. has become the largest bank in the U.S. with approximately $2.8 trillion in total assets.
Bank One Corp.
- Type of Business: Banking and Financial Services
- Acquisition Price: Approximately $58 billion
- Acquisition Date: July 1, 2004 (completed)
Bank One traces its origins to the formation of the First Banc Group of Ohio in 1968. First Banc Group expanded through acquisitions of other banks, first in Ohio and then in several other states, including Arizona, Colorado, Indiana, Texas, Utah, and Wisconsin. The company later renamed itself Bank One Corp. before being acquired by JPMorgan Chase & Co. in 2004. The merger, first announced in January 2004, made JPMorgan Chase the second-largest bank in the U.S. with $1.1 trillion in total assets, just shy of Citigroup’s $1.2 trillion. Acquiring Bank One helped bolster JPMorgan’s consumer retail banking and gave it the scale to compete more aggressively with Citigroup. The details of the deal made it clear who would soon lead the giant bank. The agreement stipulated that Bank One's chair and chief executive officer (CEO), Jamie Dimon, would become president and chief operating officer (COO) of the combined entity, and eventually succeed JPMorgan’s then-CEO William Harrison Jr. in 2006. Mr. Dimon assumed the role of CEO on December 31, 2005 and chair of the board a year later. Regarded as the nation’s preeminent banking executive, he remains in those positions today.
The Bear Stearns Companies Inc.
- Type of Business: Investment Banking
- Acquisition Price: $1.4 billion
- Acquisition Date: May 31, 2008
The Bear Stearns Companies Inc. was founded in 1923. It survived the stock market crash of 1929 and the Great Depression that followed. By the early 2000s, Bear Stearns had become one of the largest and most respected investment banks on Wall Street. But that prestige quickly vanished due to the securitization of risky debt instruments and heavily leveraged positions that blew up during the subprime mortgage meltdown and global financial crisis of 2007-2008. On the brink of bankruptcy in the spring of 2008, Bear Stearns was forced to choose between financial collapse or accepting JPMorgan’s takeover offer. The U.S. government, concerned about a possible collapse of the entire U.S. financial sector, played a major role in facilitating JPMorgan's takeover of Bear Stearns. The takeover was facilitated by a $30-billion bailout loan from the Federal Reserve to finance Bear’s less-liquid assets, such as mortgage securities that the bank was unable to sell. That unusual Fed loan ensured that JPMorgan would suffer no losses if the value of those specific assets declined. However, the fire-sale deal may not have paid off as well as expected. In 2015, CEO Jamie Dimon said that the bank already had to pay out $19 billion to settle lawsuits related to the crisis, with 70% of those costs attributable to Bear Stearns and Washington Mutual, another distressed financial institution acquired by JPMorgan during the crisis.
Washington Mutual Inc.
- Type of Business: Savings and Loan Association
- Acquisition Price: $1.9 billion
- Acquisition Date: September 25, 2008
Washington Mutual was first established in Seattle in 1889 under the name Washington National Building Loan and Investment Association. The savings and loan bank, which offered checking and savings accounts, residential mortgages, and other loans, became Washington Mutual Savings Bank in 1917. It expanded during the twentieth century by acquiring other financial institutions and had become the largest U.S. savings and loan bank by 2008. But like Bear Stearns, Washington Mutual succumbed to the stresses of the financial crisis, suffering a wave of deposit withdrawals that ended in its takeover by the Federal Deposit Insurance Corp. (FDIC). It marked the biggest banking collapse in U.S. history. In September 2008, JPMorgan acquired Washington Mutual’s banking operations from the FDIC for $1.9 billion. The deal made JPMorgan the largest depository institution in the country. However, as with the Bear Stearns acquisition, JPMorgan subsequently was forced to shoulder unexpected charges and costs related to major lawsuits.
- Type of Business: Stockbroker and Investment Bank
- Acquisition Price: $1.7 billion
- Acquisition Date: November 19, 2009 (announced)
U.K.-based Cazenove traces its origins to 1819 and is the corporate broker to some of that nation’s largest companies, as well as the Queen of England. Cazenove first joined forces with JPMorgan in late 2004 when the latter purchased a 50% stake in the U.K. company, creating a 50-50 joint venture between the two firms. The deal included an option for JPMorgan to buy the rest of the company. JPMorgan exercised that option in November 2009 and agreed to pay $1.7 billion for the remaining stake. While Cazenove’s investment banking unit had already been operating closely with JPMorgan’s activities following the initial joint venture, the transaction resulted in a combination of other parts of the banks’ businesses, such as equities and research, to be operated under the name JPMorgan Cazenove. Today, JPMorgan Cazenove operates three core businesses: Corporate Finance, which offers a full range of investment banking services to U.K.-based companies; Cash Equities, which provides corporate, institutional, and hedge fund clients cash equities services throughout Europe, the Middle East, and Africa; and Equity Research, which offers equity research services to clients in Europe, the Middle East, and Africa.