Bank of America: will spend $2 billion on restructuring Merrill Lynch & Co

On Monday, Bank of America Corporate Executive Kenneth Lewis said that it would have taken 10 years to build a bank like Merrill Lynch & co, but would also trim near-time earnings. Whilst Lehman Brothers Holdings Inc was losing the battle to sell, Merrill Lynch clinched the deal with Bank of America.

Lewis, whilst on a conference call with investors, said the purchase which is expected to be completed in the first quarter next year, would reduce earnings per share by 3 percent next year. However, by 2010 he expects the combined entity to break even.

Bank of America also said that it would see a $2 billion restructuring charge from the deal, which then would make Merrill Lynch worth $50 billion. The deal is also expected to cut pretax costs by $7 billion, said Lewis.

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