Bank of America buys Merrill - $50 billion
Soon after its talks to acquire Lehman Brothers broke down, Bank of America moves to scoop up Merrill Lynch.
NEW YORK (CNNMoney.com) -- Bank of America said Monday that it has bought Merrill Lynch in an all-stock deal valued at as much as $50 billion.
The purchase price would value the company at more than $29 a share, at least a 70% premium from Merrill's closing price on Friday of $17.05.
Concerns had been growing that Merrill would need to take more writedowns and raise more capital to shore up its balance sheet. Merrill has posted net losses of more than $17 billion over the past four quarters.
"The Merrill deal addresses what the market fears most right now - a flood of assets hitting the market," said David Alpert, managing director of Westwood Capital.
A spokesperson for Merrill Lynch would not comment. Attempts to reach Bank of America for comment were unsuccessful.
Bank of America is the nation's No. 3 bank holding company in terms of assets, behind only Citigroup and JPMorgan Chase. It is the largest by market value.
Bank of America CEO Kenneth Lewis has a history of making bold acquisitions, including most recently, Countrywide, the troubled mortgage lender. That purchase has so far exceeded expectations, with Bank of America saying recently that Countrywide would add to its earnings this year.
Some consider Merrill Lynch, and its massive retail brokerage operation, a better fit for Bank of America than investment bank Lehman would have been.