J.P. Morgan Chase said on Wednesday that it is purchasing Chicago-based Banc One Corp., not only creating a banking giant, but also spawning the fourth-largest fund firm, according to research firm Lipper of New York

The deal, for a reported $58 billion in stock, would place the combined firm steadily among the top five mutual fund complexes. While the fund business was not the main reason for the deal, rather a component of the overall transaction, it does give the combined company significant traction in this space. The deal puts the combined assets slightly ahead, by $3 billion, compared to Bank of America and FleetBoston, which announced their merger intentions in October (see MME 11/03/03).

Jeff Tjornehoj, research analyst at Lipper, said as far as the mutual fund business goes, the merger is a deal between virtual equals, with very similar assets and nearly identical expense ratios. Fidelity remains the top fund complex, with Vanguard second, and Capital Research third. The fund business created by the BoA/FleetBoston merger ranks fifth, according to Lipper.

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