- The Washington Times - Monday, October 27, 2003

BOSTON (AP) — Bank of America Corp. yesterday said it would buy FleetBoston Financial Corp. in a $47 billion deal to create a banking giant stretching from California through the South to New England.

The new company will have about 5,700 branches — nearly twice as many as nearest rival Wells Fargo — and a combined $930 billion in assets, second only to Citigroup Inc.

The acquisition, which would be among the largest ever in the banking sector, will give Charlotte, N.C.-based Bank of America a truly national presence by expanding its footprint into the Northeast.

Analysts said the deal could also trigger a wave of mergers as financial-services giants scramble keep up by pairing off with big regional banks.

“There’s speculation around here: Is it going to start a new wave of big guys buying almost-as-big guys?” said John McCune, manager of banking research at SNL Financial Corp. “With this merger, Bank of America has essentially made itself the bank of America. The other question is who else could do that? No other single bank has the same combined coverage this bank does right now.”

The announcement was a blow to Boston’s status as a financial center. Fleet’s roots go back centuries to when Boston banks financed the young nation’s shipping and textile industries. In 1784, then known as the Massachusetts Bank, it became the first federally chartered bank in the United States.

The deal, which will eliminate the Fleet name, comes less than a month after the city lost another institution when John Hancock Financial Services agreed to be acquired by Canada’s Manulife Financial Corp.

But FleetBoston and Bank of America executives said that because the companies have so little overlap, they expect the number of jobs in the Boston area to remain about the same. FleetBoston has 47,700 total employees; Bank of America has 133,000.

Bank of America was offering 0.5553 shares of its stock for each FleetBoston share. At Friday’s closing prices, that was worth $45 a share and was a 41 percent premium over FleetBoston’s Friday finish of $31.80.

In trading yesterday on the New York Stock Exchange, FleetBoston shares climbed to $39.20, up $7.40, or 23 percent, while Bank of America shares fell to $73.57, down $8.29, or 10 percent. The combined company would have annualized revenue of $27.9 billion and be No. 1 in the United States with 33 million retail customers, a 9.8 percent market share and 16,551 ATMs.

“The truly compelling argument for this merger is the long-term vision for a truly national bank,” said Bank of America’s chairman and chief executive officer, Kenneth D. Lewis, who will serve as CEO of the combined company. FleetBoston CEO Charles K. Gifford will serve as chairman.

The Fleet name will disappear not only from 1,460 branches in the Northeast but also most likely from Boston’s FleetCenter, home of the NBA Celtics and NHL Bruins, Mr. Gifford said. Both executives said the merged company’s charitable activities would, if anything, increase.

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