Press Releases

Mellon Bank and Banco Brascan Announce Strategic Alliance; Mellon to Acquire 40 Percent Ownership of Banco Brascan; Joint Venture - Mellon Brascan Asset Management - to Provide Investment Management Services

PITTSBURGH, and RIO DE JANEIRO, Brazil, Oct. 30 -- Mellon Bank Corporation (NYSE: MEL) and Brascan Brazil today announced a strategic alliance through which Mellon will, through a capital increase, acquire 40 percent of Banco Brascan, a Rio de Janeiro-based investment bank. In addition, Mellon and Banco Brascan plan to form Mellon Brascan Asset Management (MBAM), an investment management joint venture combining Mellon's global asset management expertise with Brascan's knowledge and 100 years of successful experience in Brazil. Terms of the transaction were not disclosed.

An affiliate of Brascan Brazil, Banco Brascan provides corporate and institutional financial services including brokerage, corporate finance, capital markets, foreign exchange, merger and acquisition financing and advisory, and securities trading and brokerage. Upon completion of the transaction, Mellon will own 40 percent of Banco Brascan, with another 40 percent owned by Brascan Brazil and 20 percent owned by Banco Brascan's management and employees.

"We are particularly happy about this association which will create a strong link between our operations in Brazil and those of Mellon Bank," said Antonio Paulo de Azevedo Sodre, Banco Brascan's president and chief executive officer, who will be responsible for the overall performance of the Brazilian financial operations. "This alliance is an international positioning that recognizes the global flow of funds and the demand for cross-border products and services such as asset management, custody and placing of securities, among others."

"Banco Brascan is a very well-respected investment bank and a strong partner for introducing Mellon's broad selection of banking and investment management products and services to this key strategic market," said Jamie B. Stewart Jr., vice chairman, Mellon Bank Corporation. "This alliance furthers our global strategy of entering key growth markets for core products, meeting our customers' expanding needs and building our investment management business by tapping into the rapidly expanding markets for asset management services."

MBAM will provide an array of Brazilian and U.S. equity and fixed-income products and asset management services to the rapidly growing Brazilian market. MBAM will offer its retail products under the brand name of The Dreyfus Corporation and will utilize the investment expertise of both Mellon and Dreyfus. The company will be headed by Diego G. Martinez, chief executive officer.

Brazil is the largest economy in Latin America, the ninth national economy in the world, a strong trade partner with the United States and a major center for multinational investments. With the largest population in Latin America, Brazil had a gross domestic product of US$770 billion in 1996. Brazilian per capita income is 15 percent above the Latin American average. Economic, financial and political reforms are well under way in Brazil and are likely to underpin strong economic growth and deeper and more liquid financial markets. Among the proposed reforms are changes to Brazil's pension system, which, together with recently experienced lower inflation, should promote a growing need for savings and investment products for retirement. In turn, these developments should increase the demand by Brazilian households and institutions for Mellon's and Banco Brascan's' products and services.

The alliance and related transactions are subject to U.S. Federal Reserve approval and a decree by the president of Brazil.

Brascan Brazil Ltd. is a wholly owned subsidiary of Edper Brascan Corporation, Toronto, Canada. Edper Brascan is a diversified company with operations in the natural resources, power generation, real estate and financial services sectors, and employs more than 56,000 people, primarily in Canada, the United States and Brazil.

A broad-based financial services company with a bank at its core, Mellon Bank Corporation ranks among the largest U.S. bank holding companies in market capitalization. With approximately US$1.6 trillion of assets under management or administration, Mellon provides a full range of banking, investment and trust products and services to individuals and small, midsize and large businesses and institutions. Its mutual fund company, The Dreyfus Corporation, places Mellon as the leading U.S. bank manager of mutual funds. Headquartered in Pittsburgh, Pa., Mellon's principal subsidiary is Mellon Bank, N.A.