The all-stock transaction, which has been agreed by directors of both firms, creates the largest financial services firms in the world.
By combining Merrill’s 16,000 financial advisers with BoA’s own advisers will create the largest brokerage in the world with more than 20,000 advisers and a whopping $2.5 trillion in client assets.
Post sale, BoA will also be the number one underwriter of global high yield debt, the third largest underwriter of global equity and the ninth largest adviser on global mergers and acquisitions.
BoA was said to be in talks with Lehman Brothers over a possible sale, but talks with the firm collapsed leading to Lehman filing today for bankruptcy.
In the UK Merrill owned specialist lenders Mortgages PLC and Wave and also funded edeus. MPLC was shut down earlier in the year and industry sources say Wave shared a similar fate a couple of weeks ago – though Merrill claimed at the time that it was still a going concern.
Ken Lewis, chairman and chief executive of BoA, says: “Acquiring one of the premier wealth management, capital markets, and advisory companies is a great opportunity for our shareholders.”
“Together, our companies are more valuable because of the synergies in our businesses.”
John Thain, chairman and CEO of Merrill, says: “Merrill is a great global franchise and I look forward to working with Ken Lewis and our senior management teams to create what will be the leading financial institution in the world with the combination of these two firms.”