Bank of America to Buy Merrill Lynch for $44B

By Neal Colgrass, Newser Staff

Posted Sep 14, 2008 8:19 PM CDT

(Newser) – In a day of toppling dominoes on Wall Street, Bank of America agreed to buy Merrill Lynch for $44 billion, or $29 a share—about two-thirds of what it was worth a year ago and 50% of its highest value in 2007, the Wall Street Journal reports. The deal, struck over 2 days of intense negotiations, reconfigures the US banking world by making the nation's biggest bank even more powerful.

Led by CEO Kenneth Lewis, Bank of America has already snapped up dozens of firms, including crippled mortgage lender Countrywide Financial Corp. The addition of Merrill Lynch puts BofA in charge of America's biggest team of stockbrokers, and gives it a hand in nearly every area of the nation's financial world. "Why would Bank of America do this?" one analyst asked. "You are master of the universe, basically."

A Merrill Lynch office is seen in New York in this Oct. 24, 2007 file photo. Merrill Lynch & Co., the world's largest brokerage, is expected to report quarterly earnings Thursday, July 17, 2008. (AP Photo)

In this Jan. 26, 2008 file photo, Chief Executive Officer of Merrill Lynch, USA, John Thain speaks during a working session at the World Economic Forum in Davos, Switzerland. (AP Photo)

In this Oct. 24, 2007 file photo, a man walks into a Merrill Lynch office in Menlo Park, Calif. (AP Photo)

« Prev« Prev | Next »Next » Slideshow

To report an error on this story, notify our editors.

More Newser Stories

New Wall Street: Less Risk, Less Innovation, Lower Pay

Era of investment banks ends

(NEWSER) - When Goldman Sachs and Morgan Stanley ditched the investment banking model, it didn’t just mark the end of an era, it marked the end of Wall Street as we know it, the Wall Street Journal declares in an editorial today. And with investment banks gone, the US financial system will become sturdier, but a lot less innovative. More»

10 Banks Form $70B Fund to Stave Off Crash

Paulson brokers twin public-private liquidity measures

(NEWSER) - Ten of the world's largest banks have formed a massive liquidity fund to mitigate the effects of the Lehman Brothers meltdown, reports the Financial Times. All the investment banks will be able to borrow up to a third of the $70 billion fund in order to reduce volatility and stay in business while Lehman is being wound down. They will also be able to borrow from the Fed under newly relaxed terms. More»

Feds Probe BofA-Merrill Deal

FBI, Justice Department investigate timing of bonus payments: source

(NEWSER) - Bank of America's acquisition of Merrill Lynch is the focus of an ongoing investigation by the FBI and Justice Department, sources tell the Charlotte Observer, the bank's hometown paper. The SEC and the AGs of New York and North Carolina have already launched civil probes of the timing of huge bonuses paid to Merrill execs shortly before the deal closed; the feds' involvement indicates that criminal charges may also be in play. More»

Thain Accuses BofA of Lying About Bonuses

Fired Merill CEO tries to 'set the record straight' about $3.6B payout

(NEWSER) - In his first lengthy interview since being pushed out as CEO of Merrill Lynch, John Thain tells the Wall Street Journal that Bank of America—which acquired Merrill in September—is lying about its involvement in the $3.6 billion in bonus payouts that made Thain the poster boy for corporate greed. “Getting fired is one thing,” Thain said. “But nobody has the right to say things that they know aren't true.” More»

BofA CEO Says Feds Urged Silence on Merrill Losses

Shareholders kept in the dark to ensure deal

(NEWSER) - Bank of America's CEO felt pressured by Fed Chairman Ben Bernanke and Treasury chief Henry Paulson to withhold details of last year's Merrill Lynch acquisition from shareholders, including mounting losses at Merrill that triggered a $20 billion bailout, the Wall Street Journal reports. BofA CEO Ken Lewis said in testimony examined by the Journal that he believed regulators wanted him to keep quiet about Merrill’s $15.84 billion fourth-quarter losses so shareholders wouldn’t block the deal. More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

Bank of America to Buy Merrill Lynch for $44B

OTHER STORIES ON OUR RADAR

Wall Street • Bank of America • mergers and acquisitions • Merrill Lynch • Lehman Brothers

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

New Wall Street: Less Risk, Less Innovation, Lower Pay

Era of investment banks ends

10 Banks Form $70B Fund to Stave Off Crash

Paulson brokers twin public-private liquidity measures

Feds Probe BofA-Merrill Deal

FBI, Justice Department investigate timing of bonus payments: source

Thain Accuses BofA of Lying About Bonuses

Fired Merill CEO tries to 'set the record straight' about $3.6B payout

BofA CEO Says Feds Urged Silence on Merrill Losses

Shareholders kept in the dark to ensure deal

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?

Bank of America to Buy Merrill Lynch for $44B

Bookmark & Share

OTHER STORIES ON OUR RADAR

Wall Street • Bank of America • mergers and acquisitions • Merrill Lynch • Lehman Brothers

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

New Wall Street: Less Risk, Less Innovation, Lower Pay

Era of investment banks ends

10 Banks Form $70B Fund to Stave Off Crash

Paulson brokers twin public-private liquidity measures

Feds Probe BofA-Merrill Deal

FBI, Justice Department investigate timing of bonus payments: source

Thain Accuses BofA of Lying About Bonuses

Fired Merill CEO tries to 'set the record straight' about $3.6B payout

BofA CEO Says Feds Urged Silence on Merrill Losses

Shareholders kept in the dark to ensure deal

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?