Merrill Lynch (MER) and Bank of America (BAC) - Get Report have agreed to a deal in which Bank of America would buy Merrill in a multibillion-dollar all-stock transaction.
Get up to speed on this huge merger with
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:
From
Bank of America Agrees to Buy Merrill
:
Bank of America expects to achieve $7 billion in pre-tax expense savings, fully realized by 2012. The acquisition is expected to be accretive to earnings by 2010.
The transaction is expected to close in the first quarter of 2009.
Three directors of Merrill Lynch will join the board of Bank of America.
"Acquiring one of the premier wealth management, capital markets, and advisory companies is a great opportunity for our shareholders," Bank of America Chairman and CEO Ken Lewis said. "Together, our companies are more valuable because of the synergies in our businesses."
"Merrill Lynch is a great global franchise and I look forward to working with Ken Lewis and our senior management teams to create what will be the leading financial institution in the world with the combination of these two firms," said John Thain, chairman and CEO of Merrill Lynch.
The reported deal came after Wall Street executives had been meeting Sunday in an effort to limit the damage from the likely liquidation of troubled investment bank
Lehman Brothers
(LEH)
.
Read the full version of
Bank of America Agrees to Buy Merrill
.
From
Merrill Brings a Lot of Baggage to BofA
:
Bank of America Chairman and CEO Ken Lewis is calling the $44 billion acquisition of Merrill Lynch the "deal of a lifetime," but the merger of the two powerhouses is not without challenges.
Richard Staite, an analyst in London at Atlantic Equities, writes that the deal makes it more likely that BofA will have to cut its dividend.
Jeff Harte, an analyst at Sandler O'Neill & Partners, is specifically cautious about management's ability to have done "sufficient due diligence" on Merrill Lynch's $966 billion balance sheet, he writes in a note.
He too worries about "capital and management resource constraints" as BofA integrates its July acquisition of failed mortgage lender Countrywide Financial, which is still reeling from soured mortgages and home equity loans after the meltdown of the housing market.
Read the full version of
Merrill Brings a Lot of Baggage to BofA
.
From
BofA Deal Draws Mixed Reviews in Charlotte
:
CHARLOTTE, N.C. -- Near the headquarters of Bank of America, the firm's move to acquire Merrill Lynch was generally viewed favorably Monday, but many in this city's sophisticated work force expressed skepticism about whether the financial-sector slump is near an end.
"You see Bank of America pick up Merrill Lynch, you like to think there is a rainbow after the storm," said Bob Gates, a quality assurance consultant at
Wachovia
(WB) - Get Report
, which is also based in Charlotte. "I don't think the world financial crisis is bottoming yet. There's a tremendous amount of bad debt out there, nobody's lending, and some people can't buy cars. But sometimes, before you see the light, you have to see the complete darkness."
The deal to buy Merrill Lynch "is a little scary," said Micah Sulewski, who works for a company that provides IT services to Bank of America. "You don't know what kind of rocks will be uncovered in terms of the risk. But the bank must have seen more value than risk."
Read the full version of
BofA Deal Draws Mixed Reviews in Charlotte
.
From
Cramer Tackles Lehman, Merrill News
(Video, Sept. 15):
Jim Cramer: "What happened with John Thain
CEO of Merrill Lynch was that he recognized that no matter how much they
Merrill Lynch sold of their bad mortgage portfolio... he had to sell or else they would take his stock down, and he wanted to do what was right for his shareholders. Ken Lewis
CEO of Bank of America is a better manager. Bank of America is a better manager. They knew their customers better. Lehman, Merrill and Bear
Sterns were the worst mortgage issuers of this era... This is a business that had been compromised by too much competition. In classic style, it's now consolidating." (Related:
Cramer: There's a Reason Banks Rarely Merge
on
TheStreet.com TV
)
To watch the video, click the player below:
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TheStreet.com Reload: July 2008
From
Merrill to Raise Capital, Sell CDOs
:
The brokerage firm
Merrill Lynch said after the close of trading Monday
Jul. 28 that it will sell $30.6 billion of U.S. super senior ABS collateralized-debt obligations to an affiliate of Lone Star Funds for $6.7 billion. At the end of the second quarter, the CDOs were carried at $11.1 billion, and in connection with the sale, Merrill will record a pretax writedown of $4.4 billion in the third quarter.
Read the full version of
Merrill to Raise Capital, Sell CDOs
.
From
Merrill's Debt Deal Not So Cut and Dry
:
Merrill is still open to tons of risk.
The company really only took out 25% of $6.7 billion, or $1.675 billion of risk, off the balance sheet.
Read the full version of
Merrill's Debt Deal Not So Cut and Dry
.
From
Cramer: Merrill, Sell the Whole Thing
(Video, Jul. 29):
Jim Cramer: "They
Merrill Lynch have a lot of stuff that was worthless after multiple attempts to tell us that they're not... I think that they're asset management
business is good, but Merrill should self itself now... There's a lot of
bank outfits that would like that Merrill brand name... It's a very recognizable brand, so they haven't wrecked that. They've wrecked everything else though."
To watch the video, click the player below:
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Plus, don't miss
Cramer: What Merrill and Lone Star Aren't Telling You
(Video, Jul. 30).
From
BofA Profit Slides, But Beats Expectations
:
Bank of America shares surged
Jul. 21 as much as 12% after the Charlotte, N.C., bank beat Wall Street's expectations for second-quarter earnings, despite a 41% decline in profits from a year earlier.
The bank recorded profit of $3.41 billion, or 72 cents a share, in the three months ending June 30. That compares to $5.76 billion or $1.28 a share, a year earlier, but up from $1.2 billion or 23 cents in the first quarter. Revenue rose slightly to $20.3 billion.
BofA's second-quarter profit including a pre-tax merger restructuring costs of $212 million. BofA closed its purchase of
Countrywide Financial
on July 1.
It now expects the Countrywide deal to be accretive this year, where previously it had said the deal would be neutral to earnings in 2008.
Read the full version of
BofA Profit Slides, But Beats Expectation
.
From
Cramer: Nice Work, Bank of America
(Video, Jul. 21):
Cramer: "What they're making on deposits is very, very big. And people should remember that Bank of America's got the largest deposit base...And the dividend being declared did matter. Do I think Bank of America is out of the woods? Yes... Bank of America is a different bank, given this quarter."
To watch the video, click the player below:
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From
BofA Hires Goldman Investment Banker
:
Bank of America continues hiring in and lending aggressively out of its investment banking unit, taking advantage of cautiousness on the part of its competitors to gain market share and snap up some talented executives.
Sources say BofA's latest hire is Chris Hogg, a longtime
Goldman Sachs
(GS) - Get Report
executive who was in charge of the Wall Street firm's unit that helps its financial institutions clients raise money.
Though BofA CEO Ken Lewis said last year that he had "had all the fun
he could stand in investment banking," he has lately been making more positive statements about that business, which accounted for $9.1 billion, or 24%, of the bank's $37.3 billion in second quarter revenues.
Read the full version of
BofA Hires Goldman Investment Banker
Plus, don't miss
BofA Approves $3.75 Billion Buyback
(Jul. 23) and
Cramer: Housing Bill Will Revive BofA
(Video, Jul. 30).
To stay up to date on Bank of America, Merrill Lynch and other companies in the financial sector, don't miss
TheStreet.com's
and
.
This article was written by a staff member of TheStreet.com.
