ATLANTA, Jan. 1, 2009
2 Major Bank Buyouts Completed
Bank of America's $19.4B Takeover Of Merrill Lynch, Wells Fargo's $12.7B Takeover Of Wachovia Finished
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(CBS/AP)
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Timeline Stopgap Measures A look at the series of government moves to try and stem the financial meltdown.
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Timeline Financial Meltdown Track major events that lead to one of the most tumultuous times in Wall Street's history.
Bank of America Corp. said Thursday it has completed its $19.4 billion all-stock purchase of Merrill Lynch & Co., while Wells Fargo & Co. said it has completed its $12.7 billion all-stock purchase of Wachovia Corp.
Merrill Lynch's sale to Charlotte, N.C.-based Bank of America, announced Sept. 15, creates the nation's largest financial services company. San Francisco-based Wells Fargo's purchase of Wachovia, a deal that was announced Oct. 3, creates a coast-to-coast powerhouse with community banks in 39 states and the District of Columbia.
Shareholders of Merrill Lynch received 0.8595 shares of Bank of America common stock for each common share of Merrill Lynch they owned. That valued Merrill Lynch at $19.4 billion based on 1.6 billion Merrill common shares outstanding as of the last filing date and Wednesday's Bank of America closing stock price of $14.08.
Wachovia shareholders received 0.1991 shares of Wells Fargo common stock in exchange for each share of Wachovia common stock they owned. That valued Wachovia at $12.7 billion based on 2.16 billion Wachovia common shares outstanding as of the last filing date and Wednesday's Wells Fargo closing stock price of $29.48.
Besides acquisitions, the turmoil in the banking sector has brought announcements of big job cuts and loans to several banks from the government's $700 billion rescue fund.
The Bank of America-Merrill Lynch deal was struck as the solvency of investment banks was in grave doubt, and kept Merrill, which lost billions of dollars in the subprime mortgage crisis, from a complete meltdown like the one suffered by Lehman Brothers Holdings Inc., which was forced to file for bankruptcy.
New York-based Citigroup agreed to step in and buy Wachovia's banking operations for $2.1 billion with the help of the Federal Deposit Insurance Corp. But only four days later, Wells Fargo made a higher offer that did not hinge on any government support and ultimately won the right to purchase all of Wachovia and its businesses and obligations, including all of its banking deposits.
On Dec. 11, Bank of America said it expected to cut 30,000 to 35,000 jobs over the next three years. The final number could be even higher, analysts say. Bank of America said at the time it hadn't yet completed its analysis for eliminating positions, and wouldn't until early this year. Including Merrill Lynch, Bank of America has about 308,000 employees. It said the cuts would affect workers from both companies.
Bank of America reiterated Thursday it expects to achieve $7 billion in pretax expense savings by 2012. It said the cost reductions would come from a range of sources, including the previously announced job cuts and the reduction of overlapping technology, vendor and marketing expenses.
Bank of America said it will have the largest wealth management business in the world with roughly 20,000 financial advisors and more than $2 trillion in client assets. It said the combination also adds strengths in debt and equity underwriting, sales and trading, and merger and acquisition advice, creating significant opportunities to deepen relationships with corporate and institutional clients around the globe.
As for Wells Fargo, it said that with Wachovia, it now has $1.4 trillion in assets and for the first time has a community banking presence in Alabama, Connecticut, Delaware, Florida, Georgia, Kansas, Maryland, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia and Washington, D.C. As of Thursday, Wells Fargo and Wachovia customers have free use of all of the company's combined ATMs, Wells Fargo said.
By AP Business Writer Harry R. Weber
© MMIX The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
Best-selling author Mitch Albom on his first nonfiction work since "Tuesdays with Morrie."
...and the banks wonder why the American economy is in the pits.
Posted by txgrouch2008 at 07:21 PM : Jan 01, 2009
You know YOU have a lot of mud to sling at those who are trying to save the nation from a complete financial meltdown but NOT A WORD is said about the Southern Fascist running that so called Political Party, the Republican''s. It''s like you want to just ignore the FACT that IF they do NOT remove the Regulations, if they do NOT pass Gramn, Leach, Bliley, then these banks would NOT be able to do what they have done NOR would they require a bail out! If you can''t accept responsibility for your mistakes how can ANYONE trust your opinions on ANYTHING? Sieg Heil Y''all.
"A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who, even if their action be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who necessarily, by very reason of their own limitations, chill and check and destroy genuine economic freedom. This is the greatest question of all, and to this statesmen must address themselves with an earnest determination to serve the long future and the true liberties of men".
"Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it"...
- Woodrow Wilson
Wake up, Droolers......
This top-rated piece of investigative reporting shows that Wall Street Banks took BILLIONS out of our pockets by cornering the Oil markets in 2008, controlling 81 percent of all oil contracts in the world.
http://tinyurl.com/6emukq
This article was not widely reported by virtually any other major news media (NBC, ABC, FOX, CNN, etc).
Cut and paste this and pass it on to people. We have been sold out.
As the article points out, these same Wall Street firms plan to do the same thing to the price of everything we eat or drink, using the same cheap money they are getting from our treasury to manipulate commodities markets in 2009.
Why are we paying to keep these firms in business?
Why are our taxes being used to keep them operating?
They aren''t lending money to real businesses, they aren''t helping our economy, they simply aren''t necessary for America...they are only used by the very richest parasites who are destroying our country and dictating its policies by buying out our government.
We need to put this parasite ridden "institutions" out of business.
This top-rated piece of investigative reporting shows that Wall Street Banks took BILLIONS out of our pockets by cornering the Oil markets in 2008, controlling 81 percent of all oil contracts in the world.
http://tinyurl.com/6emukq
This article was not widely reported by virtually any other major news media (NBC, ABC, FOX, CNN, etc).
Cut and paste this and pass it on to people. We have been sold out.
As the article points out, these same Wall Street firms plan to do the same thing to the price of everything we eat or drink, using the same cheap money they are getting from our treasury to manipulate commodities markets in 2009.
Why are we paying to keep these firms in business?
Why are our taxes being used to keep them operating?
They aren''t lending money to real businesses, they aren''t helping our economy, they simply aren''t necessary for America...they are only used by the very richest parasites who are destroying our country and dictating its policies by buying out our government.