Bank of America announced on Monday September 15 it would buy Merrill Lynch for $50bn in an all stock deal worth $29 a share. For the futures market, this gives BofA a chance to become a leading brokerage.
The rescue takeover, which makes BofA the world’s largest financial services company, is the latest dramatic move on Wall Street, which has been wracked by two top investment banks going down – Bear Stearns in March and Lehman Brothers over the weekend. There was widespread concern that if Lehman failed – as it has this morning (Monday September 15) – Merrill would be the next firm at risk.
BoA will exchange 0.8595 of its shares for each Merrill Lynch common share. The deal will also make Bank of America the largest brokerage in the world, with more than 20,000 advisers and $2.5tr of client assets.
Bank of America, which expects to...