Merrill Lynch Saved by Bank of America Buyout
Bank of America (BAC) has announced a all stock buyout originally valued at $50 billion of Merrill Lynch (MER), in turn saving the company from possibly filing for bankruptcy in the future like Lehman Brothers (LEH) did today.
Bank of America is has the most deposits of any US banks and now combined with Merrill Lynch the company will rival Citigroup (C), currently the largest bank in the United States in terms of total assets. The two together will now offer everything from credit card lending to fixed-income trading.
The deal which was completed in less than 48 hours has Bank of America exchanging .8595 shares of Bank of America stock for each share of Merrill Lynch stock. Merrill has dodged a similar fate of Lehman (LEH), Bear Stearns, Fannie Mae (FNM), and Freddie Mac (FRE).
“It was an opportunity of a lifetime” – Bank of America Chairman and Chief Executive Officer Ken Lewis.
Anyone a Bank of America client? I guess this means good news for you knowing that you do not have to worry about your bank going under.
Great move for BAC, puts them in fantastic position after all this passes. First Countrywide, now Merrill…
I am a client and yes it makes me feel very good
Is this actually a $50B deal, or is that just the number that everyone was quoting before BAC had 20% chopped off the top earlier today?
I thought the agreement was 0.86 shares of BAC per 1 share of MER. If BAC is currently at ~26.50, doesn’t that value MER at roughly 22-23/share?
Do we have a closing date for the agreement yet? I haven’t seen anything specifically mentioned.
No closing agreement yet or public official offer, apparently now there is speculation that the deal might fall though so we will see. You are correct though that the $50 Billion offer was based on the share price at the time and is adjusting depending on the share price.
I was Lasalle, now BAC, lovin it!
Great post Blain!