The merger, announced in April and approved by a 6-0 vote at a closed meeting of the Fed, vaults the combined bank ahead of the nation's two largest: Citicorp and Chase Manhattan.
With 4,800 branch offices in 27 states and assets of $580 billion, it will become the largest bank in the United States and the third largest in the world.
An even larger merger, still pending, would combine Citicorp and the Travelers Group.
The Justice Department's antitrust division approved the combination of BankAmerica, headquartered in San Francisco, and NationsBank, based in Charlotte, N.C., on Friday. It required that the companies sell 17 New Mexico branches to maintain local market competition. The Federal Reserve also made that a requirement of its approval.
The merged company will be called BankAmerica Corp. Its operations, including 14,000 automated teller machines, will stretch from Alaska to California along the West Coast, east to Florida and North to Illinois and New York. It will control 8 cents of every dollar deposited in U.S. banks and savings institutions.
Since the announcement of the merger plans four months ago, the Federal Reserve collected comments from more than 1,600 organizations and individuals and conducted a two-day public hearing in San Francisco.
Many expressed concern about the impact on lending to minorites and to people in poor urban neighborhoods and rural communities. A community activist in North Carolina started a hunger strike.
But, at a Senate hearing in June, Federal Reserve Chairman Alan Greenspan said that while the wave of bank mergers has reduced the number of banks nationally, it had not had a big impact on competition in individual markets.
Written By Dave Skidmore