Feds Agree: Bank of America to buy Merrill Lynch

Bank of America (NYSE:BAC) had the Federal Reserve’s approval to acquire Merrill Lynch (NYSE:MER) today (November 26). Back in September the Bank of America announced that it would buy the Wall Street bank for $44 billion at a time when Lehman Brothers faced collapse, investors fled and fears grew over the survival of Merrill Lynch.

The Federal Reserve needed to approval the deal as the merger could have made a big impact on the banking sector.

According to the Federal Reserve the largest US depository bank, Bank of America’s total consolidated assets are worth $1.8 trillion which is around 11 percent of the nation’s total. Once the Charlotte based Bank of America takes over Merrill the US banking firm will control $2.7 trillion of assets.

With Merrill Lynch main activity being in the brokerage sector and will hardly any overlapping banking activity in the major markets both the Department of Justice and the Federal Reserve said the deal would not harm competition and gave their approval.

Shares in Merrill Lynch have tumbled 78 percent over the last year and eagerly looked for investors as the Wall Street bank was on the verge of collapse due to the subprime mortgage crisis and global credit crisis.

Source: GoogleAp