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BoA completes Merrill deal at US$33b
By Zachary R. Mider |
January 3, 2009, Saturday
|
Print Edition
Print Edition
MERRILL Lynch & Co's 95-year run as an independent company is coming to an end as Bank of America Corp completed its acquisition of the broker for about US$33 billion in stock.
Bank of America, the biggest United States home lender, closed the purchase on Thursday, the Charlotte, North Carolina-based company said in a PRNewswire statement. Scana Corp, South Carolina's biggest utility owner, will replace New York-based Merrill Lynch in the Standard & Poor's 500 Index.
Merrill Lynch was founded by Charles E. Merrill in January 1914 and evolved into the world's biggest brokerage, with 17,000 financial advisers. After more than US$50 billion of losses and writedowns tied to the collapse of the US subprime mortgage market, Merrill agreed in September to a sale, escaping the fate of bankrupt Lehman Brothers Holdings.
BoA, led by Chief Executive Officer Kenneth Lewis, 61, plans to cut 30,000 to 35,000 positions from the combined companies in the next three years because of the merger and a weak US economy. Merrill CEO John Thain, 53, will remain as president of investment banking, trading and brokerage.
Shares of BoA rose 84 cents, or 6.3 percent, to US$14.08 on Wednesday in New York Stock Exchange composite trading, valuing Merrill shares at US$12.10 in the stock-for-stock exchange. That's 88 percent less than their high of US$97.53 in January 2007, according to Bloomberg News
BoA, announcing the merger on September 15, valued the deal at about US$50 billion. The transaction size has fallen since then, as the share price tumbled 47 percent.
Bank of America, the biggest United States home lender, closed the purchase on Thursday, the Charlotte, North Carolina-based company said in a PRNewswire statement. Scana Corp, South Carolina's biggest utility owner, will replace New York-based Merrill Lynch in the Standard & Poor's 500 Index.
Merrill Lynch was founded by Charles E. Merrill in January 1914 and evolved into the world's biggest brokerage, with 17,000 financial advisers. After more than US$50 billion of losses and writedowns tied to the collapse of the US subprime mortgage market, Merrill agreed in September to a sale, escaping the fate of bankrupt Lehman Brothers Holdings.
BoA, led by Chief Executive Officer Kenneth Lewis, 61, plans to cut 30,000 to 35,000 positions from the combined companies in the next three years because of the merger and a weak US economy. Merrill CEO John Thain, 53, will remain as president of investment banking, trading and brokerage.
Shares of BoA rose 84 cents, or 6.3 percent, to US$14.08 on Wednesday in New York Stock Exchange composite trading, valuing Merrill shares at US$12.10 in the stock-for-stock exchange. That's 88 percent less than their high of US$97.53 in January 2007, according to Bloomberg News
BoA, announcing the merger on September 15, valued the deal at about US$50 billion. The transaction size has fallen since then, as the share price tumbled 47 percent.
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