Europe: Bank of Scotland, Halifax tie knot

Halifax Group, the United Kingdom's largest mortgage lender, and Bank of Scotland have agreed to a $14.9 billion merger that will form Britain's fourthlargest bank in terms of assets.

Halifax and Bank of Scotland investors will get one share of the new holding company, to be known as HBOS, for each share they own.The merger values HBOS at about $40 billion. Halifax shareholders will own 63% of the enlarged company.

The two banks will continue to operate under their current brand names. Bank of Scotland's Edinburgh headquarters will run the combined group's corporate banking business, while the retail banking operations will be based in Yorkshire, England.

The merger followed failed talks between Bank of Scotland and Abbey National, Britain's secondlargest mortgage lender.