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Charlotte-based First Union has been the worst offender in not delivering on acquisition promises. It has been one of the most aggressive of consolidators: with the belligerent Ed Crutchfield as CEO it has bought over 80 different institutions over the last 12 years. Now, though, Crutchfield has declared a moratorium on acquisitions, claiming that it's time to focus on integration. Not that he had a choice. "When Ed says that he won't do any deals for a while what he really means is that he can't afford to," says Katrina Blecher, regional banks analyst at Brown Brothers Harriman.
At least half of First Union's acquisitions have been made since 1993, with a total deal value of $36.7 billion (figures are not available for all the acquisitions). These have included banks, savings and loan institutions, financial consulting firms, speciality finance units, investment management firms, and investment banking and broker/dealer shops (notably Wheat First and Everin). The plan has been to build new businesses that can generate consistent higher growth rates and higher price-earnings income, but use less capital.
On the one hand this has turned a large regional bank in North Carolina with assets of $7 billion in 1985 into a diversified financial services institution, and one of the US's largest banks, with assets of $230 billion.