THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, March 5, 1996 TAG: 9603050176
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Medium: 60 lines
Internet Inc., whose MOST network ties together bank-teller machines in a dozen middle-Atlantic and southeastern states, has agreed to merge with the parent of the HONOR teller-machine network in the Southeast.
Their combination would give holders of MOST and HONOR cards access to more than 19,000 teller machines in an 18-state region stretching from Connecticut to Florida and west to Arkansas.
The Internet agreement with Southeast Switch Inc. in Maitland, Fla., was driven partly by consolidation in the banking industry and the push by larger institutions like NationsBank and First Union Corp. into more states, said David A. O'Connor, president and chief executive officer of Reston-based Internet.
The prospect of aggressive competition from outside the banking industry also prompted the two companies to join forces, he said.
``We think it's very important that financial services remain in the purview of regulated financial institutions,'' said O'Connor, who cited the aggressive promotion of personal-finance software by Microsoft Corp. and other software manufacturers.
Internet, which is owned by 19 banks, ties together 8,500 teller machines. Southeast Switch's HONOR network links 11,000 teller machines. Southeast Switch is owned by about two dozen banks.
In addition to linking teller machines, both companies' networks serve as intermediaries between banks and point-of-saleterminals at supermarkets, service stations and other retailers.
Measured by the number of teller machines in the merged network, the MOST-HONOR combination would become the third-largest network in the country after the Star network in California and the MAC network in the northeastern states.
By merging, MOST and HONOR will have the resources to develop more sophisticated services for banks and their customers, O'Connor said. These include home-banking systems for personal computers and electronic ``smart'' cards for making small retail purchases.
The consolidated company will be based in Maitland, Fla., and will have a 24-member board of directors. Internet and Southeast Switch will name an equal number of directors to the board.
The two companies said they expect to come up with a new name by midyear and to complete their merger by year-end.
O'Connor, whose career in teller-machine networks began in Norfolk in the early 1970s, has been named vice chairman of the new company. Thomas O. Bennion, president and CEO of Southeast Switch, will hold the same posts in the new company.
Formed in 1984 from the merger of two earlier ATM networks, Internet has held merger talks with Southeast Switch on several occasions since 1987. In early 1988, the two companies announced a merger agreement but called off the consolidation 18 months later. by CNB