ABN was given permission by Dutch regulators to sell its LaSalle Bank unit, and it is expected that Bank of America will acquire LaSalle Bank by the end of this year. Sounds lovely on the surface of it, as if a foreign entity is going to lose and the good old USA is going to get back what is rightly American. With any merger, of course, comes synergies, those cost-saving actions that make mergers work financially, and that's become a very international goal.
Community advocates have released a study that claims Bank of America's purchase of LaSalle Bank will result in 10,500 synergies. That is, 10,500 fewer people working and drawing salaries. Not sounding quite so lovely any more, is it?
Anderson Economic Group took a hard look at the impact that the merger is likely to have on LaSalle employees and the community at large, which would of course suffer some effects of job losses in the area. For example, a popular lunching spot could go out of business if a LaSalle office were to be shuttered, adding more lost jobs that result indirectly from the merger.
There would be plenty of bad news to go around for everyone, if Anderson's report is accurate. Bank of America is expected to consolidate its headquarters at its home base, meaning the loss of LaSalle's Chicago headquarters and attendant jobs. Without a base in the city, Bank of America would find a cost savings on rent and taxes, to the detriment of Chicago and the state of Illinois. Perhaps as much as $48 million in lost revenue, according to Anderson's Tim Mahon.
Federal regulators have yet to weigh in, and the Anderson Economic Group report will be used by the faith-based and union-led crew that hired Anderson to make this analysis. Look how bad it will be, the report presents in its worst-case scenario, while Bank of America will counter with a rosy outlook that promises minimum job losses while achieving brilliant synergies.
The Nineteenth Century robber barons knew that consolidation, creating one big entity from many small firms, was the way to get rich. At the time, Congress figured out that it was not good for the country, and anti-trust laws were enacted to protect the little people. Is anyone still minding the monopoly store?