Case Interview Question #00313: The year is 1997. The Chairman and Chief Executive Officer of Chicago, Illinois-based Bank One Corporation (NYSE: ONE) has just announced that Bank One has completed the acquisition of First USA Inc. (NYSE: FUS), headquartered in Dallas, Texas. First USA is a financial services company specializing in the credit card business and is currently the fourth largest among domestic Visa and MasterCard issuers with $23.2 billion in managed receivables and 16.3 million cardholders.
With assets of $101.6 billion and common equity of $8.2 billion, Bank One provides the full range of commercial banking and financial services, whereas First USA only provided credit card service. The management of Bank One has decided that after the completion of the merger, First USA will run their combined credit card department. The combination of First USA’s operations with Bank One’s 16.0 million cardholders and $11.9 billion in managed card receivables will produce the nation’s third-largest card operation with 32.3 million cardholders and card assets of $35.1 billion.
Suppose you are tasked on the integration team. What would be your major concerns?
I did not have a generic structure for this merger and acquisition case, rather I listed the key issues I would be concerned with, and then dug into each one. I started with some clarifying questions. I discovered that Bank One had definitely decided to use First USA to run their credit card department; there would be no discussion about this.
1. Cultural and Organizational Issues: How alike are Bank One’s and First USA’s cultures and organizations?
The first set of issues that I outlined was related to the organizations themselves. This is basically the cultural lens that