Walter V. Shipley, the former chairman and chief executive who led the friendly merger of Chemical Banking with Chase Manhattan to create the biggest U.S. bank and predecessor of what is now JPMorgan Chase, has died. He was 83.
Shipley, who led both Chase Manhattan and Chemical for more than 40 years, died on Friday. He had cancer and passed away in Florida, a Chase spokesman said, without giving further details.
In fewer than five years, Shipley propelled Chemical into the nation's leading bank with almost $300 billion in assets — first with the $1.9 billion purchase of Manufacturers Hanover Corp. in 1991 and then in 1995, with its $10.9 billion merger with Chase Manhattan in which it took Chase's name.
Despite an imposing physical stature of 6 feet 8 inches, Shipley was an understated presence compared with charismatic bankers of the era like Citigroup Inc.'s Sandy Weill and John Reed.
"On Friday, the world lost a critical force behind what is now JPMorgan Chase and, more importantly, an individual universally regarded with praise for his character, generosity and business acumen," Jamie Dimon, the bank's chairman, said in note to employees.
"Walter fostered an open, entrepreneurial meritocracy — one that carries through to this day at JPMorgan Chase," Dimon said. "Widely respected for being a straight shooter, Walter believed there was no substitute for talent, drive and hard work."
With the merger of Manufacturers Hanover — located across Park Avenue from Chemical's midtown Manhattan headquarters — to form the third-biggest U.S. lender upon the deal's completion, Shipley insisted that some of the top jobs at the new company go to managers from the acquired bank. He relinquished the CEO title to Manufacturers Hanover's chief, John McGillicuddy, until McGillicuddy's scheduled retirement two years later in 1993.
"Some people's philosophy is I win, you lose," Shipley said, according to a 1999 New York Times article. "Our philosophy is that the best is when both sides feel they've come out winners."
'Contained ego'
When Shipley retired in 1999, Chase's shares had gained eightfold over the prior decade, giving the bank a market capitalization of $95.8 billion, according to data compiled by Bloomberg. Chase went on to acquire J.P. Morgan & Co. in 2000 for about $36 billion in stock, at the time the world's third-biggest commercial bank merger.
That he was able to do the deals he did stemmed from his "very contained ego," said Lawrence A. Bossidy, then chairman of Allied Signal Inc., according to the 1999 Times article. Shipley was "able to get people to work very hard for him and get results."
Early life
Walter Vincent Shipley was born Nov. 2, 1935, in Newark, New Jersey, one of four children of Linwood Parks Shipley, a partner in the Wall Street investment firm Brown Brothers Harriman & Co., and the former Emily Herzog.
In 1954, Shipley attended Williams College in Williamstown, Massachusetts, where he studied economics and political science and was captain of the basketball team. He was expelled twice for poor grades, leaving his junior year in 1956. That year, he joined New York Trust Co., which in 1959 merged with Chemical Corn Exchange Bank.
Attending night classes, Shipley received a bachelor's degree from New York University in 1961. His climb up the corporate ladder began as a loan officer. In 1979, he was named senior executive vice president for worldwide wholesale banking, according to a 1995 American Banker article. He was named president in 1982 and a year later became chairman and CEO.
Texas transaction
Shipley oversaw Chemical's $465 million acquisition of Morristown, New Jersey-based Horizon Bancorp in May 1986. Due to New Jersey banking-law provisions, the deal was completed more than two years later. In December 1986, soon after Texas changed its regulations to allow cross-border bank transactions, he engineered the takeover of Houston-based Texas Commerce Bancshares Inc. for $1.19 billion — then a record.
Chemical's 1991 merger with Manufacturers Hanover was billed by the banks as "a merger of equals." The combination allowed the new Chemical to shed 6,000 jobs and, according to a 1993 Finance magazine article, save $350 million in its first 18 months.
The Chase merger also involved efficiencies of scale, with 12,000 jobs out of 75,000 cut and about 100 Chase branches closed. The new entity became the leading bank to corporate America as well as a top national player in credit cards, mortgages and syndicated lending. Its retail branch network, operating under Chemical Bank and the Chase Manhattan Bank, was the biggest in the tri-state metropolitan area of New York, northern New Jersey and southern Connecticut.
Risk management
Among the deal's most significant outcomes was a corporate turn toward risk management, whereby Shipley created a risk-management committee at the board level.
As in the Manufacturers Hanover merger, he made a place for the other CEO, Chase's Thomas Labrecque, who was named chief operating officer. While Shipley later asserted that the two executives were equals at the helm of Chase, William B. Harrison Jr. was named Shipley's successor upon his retirement in 1999 at the age of 63. Labrecque died of lung cancer the following year at 62.
Shipley was for many years the chairman of Goodwill Industries of Greater New York and Northern New Jersey, the nonprofit that helps individuals with disabilities and other barriers find employment.
He married Judith Lyman in 1957. They had five children: Barbara, Allison, Pamela, Dorothy and John.
