Bank of America buys Merrill Lynch

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By Madlen Read and Tim Paradis ASSOCIATED PRESS

UPDATED:

NEW YORK — Bank of America on Monday began adding another slice to its growing financial services empire, buying Merrill Lynch in a $50 billion deal that would create a bank offering everything from fixed-income trading to credit card lending.

It will rival Citigroup Inc., the biggest U.S. bank in terms of assets.

Bank of America Corp. said early Monday it would acquire Merrill Lynch in an all-stock transaction worth about $50 billion that should lift the uncertainty shrouding Merrill since the start of the credit crisis over a year ago.

Charlotte, N.C.-based Bank of America has the most deposits of any U.S. bank, while Merrill Lynch & Co. Inc. is the world's largest and most widely recognized brokerage.

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"Acquiring one of the premier wealth management, capital markets, and advisory companies is a great opportunity for our shareholders," Bank of America Chairman and Chief Executive Officer Ken Lewis said in a statement. "Together, our companies are more valuable because of the synergies in our businesses."

Under terms of the transaction, Bank of America would exchange 0.8595 shares of Bank of America common stock for each Merrill Lynch common share, the statement said.

The deal values Merrill at $29 a share. That represents a 70 percent premium over the brokerage's Friday closing price of $17.05, but well below what Merrill was worth at its peak in early 2007, when its shares traded above $98.