Bank of America agrees to $50bn Merrill buy

The bank has the most deposits of any US bank, while Merrill Lynch is the world's largest and most widely recognised brokerage firm.

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Bank of America (BoA) has announced it is set to acquire Merrill Lynch in an all-stock transaction worth about US$50 billion (Dh183.7bn). The bank has the most deposits of any US bank, while Merrill Lynch is the world's largest and most widely recognised brokerage firm. A combination of the two will create a global financial services giant involved in everything from fixed-income trading to stock underwriting and credit card lending, which will rival Citigroup, the biggest US bank in terms of assets. The deal still requires shareholder approval from both firms and regulatory clearance.

Under the agreement, three directors of Merrill Lynch will join the BoA board of directors. Ken Lewis, the chairman and chief executive of BoA said: "Together, our companies are more valuable because of the synergies in our businesses." Under terms of the transaction, BoA would exchange 0.8595 shares of its common stock for each Merrill Lynch common share. The deal values Merrill at $29 a share. That represents a 70 per cent premium over the brokerage's Friday closing price of $17.05, but well below what Merrill was worth at its peak early last year, when its shares traded above $98.

* AP