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Merrill Lynch & Co. has found a deep-pocketed partner to help out in its time of need, as the venerable investment bank has agreed to be acquired for $50 billion by Bank of America Corp. The all-stock transaction will see the largest U.S. consumer bank pay around $29 per share for Merrill, a premium of roughly 70% over the investment bank's closing price of $17.05 on Friday. Shares of Merrill have traded between $16.60 and $78.66 over the past year.
Announced on Monday morning before financial markets opened in Asia, the merger was approved by both
companies' boards of directors after rushed talks over the weekend. Under terms of the transaction, Bank of America would exchange .8595 shares of its common stock for each Merrill Lynch common share. The price is 1.8 times stated tangible book value.
A tie-up between Bank of America and Merrill Lynch leaves Lehman Brothers Holdings Inc. without a chair as the music begins to stop. After Barclays plc pulled out of talks to buy Lehman on Sunday, Bank of America was seen another likely candidate. The consumer bank chose to pass on Lehman and instead go after Merrill Lynch, which is in a stronger position although it has faced similar troubles and pressure on its stock over the past few weeks. Return to TheDeal.com throughout the day for updates on this merger and the status of Lehman Brothers. - George White See press release See Barclays/Lehman post on Dealscape CategoriesComments
From: James Klich,
Bank Of America will cut jobs at Merrill Lynch. I would expect 15,000 job cuts at ML. The cuts should start in the next 3 months. In the long run this will make the bank stronger.
Posted on:
September 15, 2008 7:41 PM
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Bank Of America will cut jobs at Merrill Lynch. I would expect 15,000 job cuts at ML. The cuts should start in the next 3 months. In the long run this will make the bank stronger.