Mergers and Acquisitions by Bank of America

B. Rajesh Kumar
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B. Rajesh Kumar: Institute of Management Technology

Chapter 30 in Wealth Creation in the World’s Largest Mergers and Acquisitions, 2019, pp 259-270 from Springer

Abstract: Abstract In the year 1998, the Bank of America was formed by the merger between the NationsBank and Bank of America. This union created a bank with assets of $ 570 billion and extensive network of 4800 branches. During the period 2004–2007, the Bank of America bought FleetBoston Financial for $47 billion, credit card giant MBNA for $35 billion, US Trust for $3.3 billion, and LaSalle Bank for $21 billion. In 2008, Bank of America acquired Countrywide Financial for $4.1 billion and Merrill Lynch for $50 billion which was an all-stock deal. The deal with FleetBoston consolidated Bank of America’s position as US’s second largest bank ranked by assets behind Citigroup. The deal valued FleetBoston at about $45.46 a share. Fleet shareholders received 0.5553 share of Bank of America for each of their shares. On June 30, 2005, Bank of America announced the definite agreement to acquire MBNA Corporation. The acquisition combined US’s largest domestic bank with a leading provider of credit card and payment products. The acquisition enhanced Bank of America’s product mix and customer reach. Bank of America became one of the largest credit card issuers in the United States with $143 billion in managed outstanding balances and 40 million active accounts. The deal was valued at $35 billion in total. Lloyds Banking Group bought the MBNA credit card business from Bank of America for 1.9 billion pounds ($2.4 billion). The acquisition was aimed at reducing Lloyds’ reliance on mortgage lending. During November 2006, Bank of America acquired Charles Schwab’s private banking division for $3.3 billion in cash. This deal heralded Bank of America’s entry into the private banking industry sector. On April 23, 2007, the Bank of America entered into a definitive agreement with ABN AMRO, the parent company of LaSalle Bank and its subsidiaries to acquire LaSalle Bank. During 2008, Bank of America bought Countrywide Financial for $4.1 billion in an all-stock deal. The acquisition created the US leading mortgage originator and servicer.

Keywords: LaSalle Bank; FleetBoston Financial; Acquisition Announcement; Time Window Period; Deposit Market Share (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/978-3-030-02363-8_30

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