An M&A formula for banks.

• Position: Mergers and acquisitions - Management Strategy - Interview

What are the secrets to successful mergers and acquisitions? For Banc One, they're making good choices in partners, pushing local autonomy and sharing ideas.

John W. Westman, the 51-year-old senior vice president and CFO of the $60-billion Banc One Corp., plays a leading role in the bank's aggressive merger and acquisition strategy.

Banc One's most recent activity is the proposed acquisition of the $3-billion Key Centurion Bank in West Virginia expected to be completed early this year. Its largest merger transaction was the acquisition of the failed MCorp. banks in Texas.

While Banc One's leading identifier of prime merger and acquisition candidates is Executive Vice President and lawyer Bill Boardman, Westman and his corporate finance division are the first to carefully assess the ability of the candidates to match Banc One's rigorous financial standards. Here's how they do it.

FINANCIAL EXECUTIVE: What's the nature of your division's role?

JOHN W. WESTMAN: Our work falls into two areas: preannouncement and postannouncement. During preannouncement, our role is to perform the detailed analysis to determine the value of the transaction from a financial perspective.

The postannouncement activity places us at the focal point of the short-term due-diligence activities. We'll perform accounting reviews and review the audit work from outside auditors. We also act as a network for the nonfinancial reviews that are to be conducted. We pull together a book that identifies any issues we find in due diligence.

FINANCIAL EXECUTIVE: How long does it take to perform this analysis?

WESTMAN: We can do it in an hour if we have the right information. In one case, it took only part of a day. We usually sit down with some key financial people in the other organization and talk about trends in various categories in the operating statement. This gives us information on the key things that matter to us.

FINANCIAL EXECUTIVE: How large a team do you bring in?

WESTMAN: We can operate separately or as a team. We've worked it both ways. Most often, these are the people who are involved: the treasurer, who's been involved in all but two acquisitions since the start of our company, and a CPA, who is a mergers and acquisitions specialist. And occasionally I'll go along and assist. We have other staff in corporate finance who can step away from their day-to-day assignments and help. We usually have to pull together a large team in a hurry. Very often, it's two or three people who do the work.

FINANCIAL EXECUTIVE: How do you present the merger and acquisitions to your investors and stockholders?

WESTMAN: The first people we want to reassure are the rating agencies. Our bondholders are important to us. We will sometimes call our rating agencies with the preannouncement to explain what we're doing and what we see as the attraction financially. We'll also try to explain the transaction in terms of how it fits with our strategies. These contacts involve a lot of one-on-one conversations.

We're trying to build our company so that it looks tomorrow a lot like it looked yesterday. We're trying to buy...