Bank of America, Merrill Lynch & Co. Shareholders Sign Off On Merger

Bank of America Corp. and Merrill Lynch & Co. shareholders Friday separately approved BoA's acquisition of the New York investment bank, though the companies gave scant details on the outcomes.

In short press releases, neither company divulged the preliminary tallies from their respective meetings, though a source close to Merrill said a "very large" percentage of shares backed the $19 billion sale.

Representatives for Merrill and the $1.83 trillion-asset Bank of America would not comment.

The Charlotte-based bank said in a press release that it still expects to complete the purchase this month. The acquisition also received approval Friday from the European Commission. The Federal Reserve approved the deal last month.

In the municipal market, the combination will bring together Merrill, the second-busiest senior manager, having underwritten more than $39.7 billion in debt so far this year, with Banc of America Securities LLC, which ranked seventh, senior managing more than $19.2 billion, according to data from Thomson Reuters.

Analysts had mostly anticipated that investors would back the acquisition, but said Bank of America faces mounting challenges with integration, due to worsening credit, frozen capital markets, and an economy that is a year into recession.

Jeffery Harte, an analyst at Sandler O'Neill & Partners LP, said continued market deterioration validates concerns that the companies are combating problems that won't go away overnight. "What you are hopefully getting in return is a strong combined balance sheet that now has more implicit government support," he said in an interview.

"That doesn't change the amount of marks they each have to take or the losses that Bank of America will have in its consumer portfolios," he added.

"This deal has always had less wiggle room than many others because there was more top-line risk and fewer expense saves," said Betsy Graseck, an analyst at Morgan Stanley. "There are also several different buckets of risk at work here."

The deal, which was valued at $50 billion when it was announced Sept. 15, is now worth roughly $21 billion, thanks to BoA's declining stock price. The bank's shares have shed about 54.8% since mid-September.

The deal, under which Merrill would become a wholly owned unit of BoA, is expected to close by the end of the year.

 

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