Bank of America to Buy Merrill
By MATTHEW KARNITSCHNIG, CARRICK MOLLENKAMP and DAN FITZPATRICK
September 15, 2008 3:19 a.m.
In a rushed bid to ride out the storm sweeping American finance, 94-year-old Merrill
Lynch & Co. agreed late Sunday to sell itself to Bank of America Corp. for $50
The deal, worked out in 48 hours of frenetic negotiating, could instantly reshape the U.S.
banking landscape, making the nation's prime behemoth even bigger. Early Monday, the two
firms said the directors of both companies had agreed to the deal, which will be subject to
shareholder and regulatory approvals.
Driven by Chief Executive Kenneth Lewis, Bank of America has already made dozens of
acquisitions large and small, including the purchase of ailing mortgage lender Countrywide
Financial Corp. earlier this year. In adding Merrill Lynch, it would control the nation's largest
force of stock brokers as well as a well-regarded investment bank.
The combination, if approved by shareholders, would create a bank of vast reach, involved in
nearly every nook and cranny of the financial system, from credit cards and auto loans to
bond and stock underwriting, merger advice and wealth management. "Acquiring one of the
premier wealth management, capital markets, and advisory companies is a great opportunity
for our shareholders," Mr. Lewis said in a statement. "Together, our companies are more
valuable because of the synergies in our businesses."
Through the weekend, federal officials, including Federal Reserve Bank of New York head
Timothy Geithner, made it clear that they strongly encouraged a deal to sell Merrill. They
worried the firm could be the next to approach the brink of failure after Lehman Brothers
Holdings Inc., said people familiar with the matter.
The all-stock deal came together quickly. With Merrill stock dropping sharply last week,
Merrill President Gregory Fleming, a former financial-institutions adviser, urged Merrill
Chief Executive John Thain to contact Mr. Lewis to see if he would be in