BofA, Merrill present united front to public
Bank of America;s $50 billion all-stock acquisition Merrill Lynch will help “create the premier financial services company in the world,” the firms’ chief executives promised.
Bank of America Corp.’s $50 billion all-stock acquisition of Wall Street giant Merrill Lynch & Co. Inc. will help “create the premier financial services company in the world,” the firms’ chief executives emphasized in a press conference this morning.
The merger will make Bank of America the largest brokerage house in the world with more than of 20,000 financial advisers and $2.5 trillion in client assets, according to the Charlotte, N.C.-based firm’s chief executive, Ken Lewis.
The reaction of the merger from many of Merrill Lynch’s 16,000 financial advisers has been almost entirely positive, Merrill CEO John A. Thain said during the press conference.
“We thought this was the strategic opportunity of a lifetime,” said Mr. Lewis, calling Merrill Lynch “the best wealth management team in the world.”
Bank of America did not ask for any capital relief to do the deal.
It will maintain New York-based Merrill Lynch’s name and is expected to fully integrate its numerous business operations by 2010, according to Mr. Lewis.
Current assets under management figures for the two firms include $1.4 trillion at Merrill Lynch and $589 billion for Bank of America.
The deal took less than 48 hours to complete with discussions beginning between the two financial services giants on Saturday morning after Mr. Thain contacted Mr. Lewis.
Under terms of the transaction, which is expected to close in the first quarter of 2009, Bank of America would exchange 0.8595 shares of its common stock for each Merrill Lynch common share, which is 1.8 times stated tangible book value.
The agreement also means three Merrill Lynch directors will join Bank of America’s board of directors.
How many of Merrill Lynch’s 60,000 employees will be retained by Bank of America is still to be determined, Mr. Thain said, adding he is also uncertain what his role will be going forward.
Bank of America’s headquarters will remain in Charlotte, N.C., but the firm will have a bigger presence in New York as a result of the merger, Mr. Lewis said.
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