Bank of America completes Merrill Lynch investment bank purchase

January 2, 2009 by · Leave a Comment
Filed under: Industry News 

Just what we need is more super-sized banks.  Now when BofA gets into trouble we will be talking about how they are “too big to fail”.  I thought we passed an act in the 90s that prevented investment and commercial banks to be under one roof?  How soon we forget.   


Bank of America Corp completed its purchase of Merrill Lynch & Co on Thursday, creating the largest U.S. bank and perhaps one of the biggest challenges yet for longtime Chief Executive Kenneth Lewis.

The closing allows Bank of America to bypass JPMorgan Chase & Co and Citigroup Inc in size, giving it about $2.7 trillion of assets.

Bank of America had said it expected to issue 1.71 billion common shares, equal to $24.1 billion, plus 359,100 preferred shares in the merger. Merrill shareholders received 0.8595 of a Bank of America common share for each of their common shares.


The transaction, originally valued at $50 billion, came to fruition in the early morning of September 15, about an hour before Lehman Brothers Holdings Inc went bankrupt, and may have saved Merrill from a similar fate.


It ends more than 94 years of independence for Merrill, after a year when the five top Wall Street banks were bought, went bankrupt, or changed their business structures.


Lewis is swallowing Merrill’s “thundering herd” of 17,000 brokers, which he has called the “crown jewel” of the acquisition. He is also absorbing Merrill’s big investment bank, which by volume ranked fifth in debt and equity underwriting and third in merger advice in 2008, Thomson Reuters data show.

Source: Reuters


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