By Lisa Kerner
Charlotte, N.C., Sept. 15 - Bank of America Corp. agreed to buy Merrill Lynch & Co., Inc. in a $50 billion all-stock transaction, it was announced on Monday.
The deal calls for Bank of America to exchange 0.8595 shares of its common stock for each Merrill Lynch common share.
According to Bank of America, the price is 1.8 times stated tangible book value.
Bank of America said that once the acquisition is completed, it will be the number-one underwriter of global high-yield debt, the third-largest underwriter of global equity and the ninth-largest adviser on global mergers and acquisitions based on pro forma results for the first half of 2008.
The transaction is expected to close in the first quarter of 2009, pending the approval of both companies' shareholders, a Bank of America news release said.
Three directors of Merrill Lynch will join the Charlotte, N.C.-based bank's board of directors.
Bank of America chairman and chief executive officer Ken Lewis called the deal a "great opportunity" for his company's shareholders.
Combining Bank of America and Merrill Lynch, a New York investment firm, brings "global scale in investment management" including an approximately 50% ownership in BlackRock, which has $1.4 trillion in assets under management, the news release said.
Bank of America was advised by J.C. Flowers & Co. LLC, Fox-Pitt Kelton Cochran Caronia Waller and Bank of America Securities.
| Acquirer: | Bank of America Corp.
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| Target: | Merrill Lynch & Co., Inc.
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| Announcement date: | Sept. 15
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| Transaction total: | $50 billion
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| Price per share: | 0.8595 Bank of America shares
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| Expected closing: | First quarter of 2009
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| Stock price for acquirer: | NYSE: BAC: $33.74 on Sept. 12
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| Stock price for target: | NYSE: MER: $17.05 on Sept. 12
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