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Bank of America attempts takeover of Merrill Lynch

Monday, September 15, 2008

Bank of America Corporate Center, located in the center of uptown Charlotte, North Carolina.
Image: Fife Club.

Bank of America (BoA) is attempting a takeover of Merrill Lynch, which, if successful, would combine two of the largest banks in the world. BoA would buy Merrill Lynch for around $44 billion in stock. BoA, the largest bank in the United States, has been looking for a major acquisition for the last few months. The bank was seen as a possible buyer of Lehman Bothers before it pulled out, citing lack of financial support by the U.S. government, and possible shareholder problems.

Merrill's CEO John Thain is believed to have initiated the discussion with Kenneth Lewis, BoA’s chief executive. It is believe that Merrill has been suffering major problems with a lack of cash on hand to operate its business. According to The New York Times, Thain believes that unless it can secure a deal with another bank, then it could possible face a collapse. Thain also believes that the U.S. government would not step in to stop such a collapse, as with the current situation with Lehman Brothers.

BoA would buy Merrill at $29 a share. On Friday, Merill stock price closed at $17.05.

Merrill Lynch has suffered a massive drop in its share price over the last year, down 68 percent due to subprime mortgage crisis. Merrill had over $10 billion pumped into the bank in December 2007 and January 2008 by sovereign wealth funds.


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  This page is archived, and is no longer publicly editable.
Articles presented on Wikinews reflect the specific time at which they were written and published, and do not attempt to encompass events or knowledge which occur or become known after their publication.

Got a correction? Add the template {{editprotected}} to the talk page along with your corrections, and it will be brought to the attention of the administrators.

Please note that due to our archival policy, we will not alter or update the content of articles that are archived, but will only accept requests to make grammatical and formatting corrections.

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