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Bank of America, Fleet OK Merger
1 hour, 38 minutes ago Add Business - Reuters to My Yahoo!
By Jonathan Stempel
NEW YORK (Reuters) - Bank of America Corp. (NYSE:BAC - news) and FleetBoston Financial Corp. (NYSE:FBF - news) shareholders on Wednesday approved the banks' merger, which will create a banking powerhouse with nearly $1 trillion in assets.
The votes, tabulated in separate shareholder meetings, were expected, and constitute the last major steps in the merger process, which the banks hope to finish in early April.
Fleet shareholders are to receive 0.5553 of a Bank of America common share for each of their shares. The merger was valued at $47 billion when it was announced last October.
The combined Bank of America will stretch from New England to the U.S. southeast to California, with about $936 billion of assets, 180,000 employees and 5,700 banking offices in 29 states and the District of Columbia.
Bank of America will be the third largest U.S. bank, after Citigroup Inc. (NYSE:C - news), and after J.P. Morgan Chase & Co. (NYSE:JPM - news) finishes buying Bank One Corp. (NYSE:ONE - news). Bank of America will rank No. 2 until the Bank One purchase is completed.
Kenneth Lewis, Bank of America's chief executive officer, said the company hopes to build a "broad, deep relationship" with customers that "will drive returns for shareholders."
The Federal Reserve (news - web sites) approved the combination on March 8. It estimated Bank of America will control 9.9 percent of U.S. bank deposits, just below the 10 percent maximum. Bank of America is based in Charlotte, North Carolina, and Fleet in Boston.
The merger will create a dogfight in New England for Fleet customers. BankNorth Group Inc. (NYSE:BNK - news) CEO Bill Ryan, whose bank will become the largest based in the region, and Sovereign Bancorp Inc. (NYSE:SOV - news) CEO Jay Sidhu have said they plan to win billions of dollars of business from Fleet customers.
"I want a New England bank for New Englanders," one Fleet shareholder said at that bank's shareholder meeting.
Fleet CEO Charles "Chad" Gifford said the banks will remain committed the New England community. Lewis will remain Bank of America's CEO and Gifford will become chairman.
CREDIBILITY
Bank of America, whose advertising campaign promises "higher standards," has been scurrying to restore its credibility with investors because of its roles in some financial scandals, and concern it overpaid for Fleet.
The two banks on Monday agreed to pay $675 million to settle regulatory probes into improper mutual fund trading. Bank of America last week agreed to a $10 million SEC penalty for failing to produce documents in a separate trading probe.
Italian investigators are still probing Bank of America's role in the collapse of Parmalat Finanziaria SpA (PRFI.MI).
Responding to comments from Evelyn Davis, a well-known corporate gadfly, Lewis estimated the bank had about $600 million of exposure to the food company, some of which it has written off. He added: "We have held everybody that we know was involved accountable, and they are no longer with us."
The banks plan to cut up to 13,000 jobs through layoffs and attrition, the Wall Street Journal said on Wednesday, citing unnamed people familiar with the matter.
Bank of America spokeswoman Eloise Hale said "there will be job cuts" but declined to provide a number. The banks have targeted $1.1 billion of annual cost savings by 2005.
On Wednesday morning, Bank of America shares rose 34 cents to $80.45, and Fleet shares rose 25 cents to $44.59. Bank of America shares closed at $81.86 immediately before the merger.
(Additional reporting by Philip Klein)
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Bank of America, Fleet OK Merger
1 hour, 38 minutes ago Add Business - Reuters to My Yahoo!
By Jonathan Stempel
NEW YORK (Reuters) - Bank of America Corp. (NYSE:BAC - news) and FleetBoston Financial Corp. (NYSE:FBF - news) shareholders on Wednesday approved the banks' merger, which will create a banking powerhouse with nearly $1 trillion in assets.
The votes, tabulated in separate shareholder meetings, were expected, and constitute the last major steps in the merger process, which the banks hope to finish in early April.
Fleet shareholders are to receive 0.5553 of a Bank of America common share for each of their shares. The merger was valued at $47 billion when it was announced last October.
The combined Bank of America will stretch from New England to the U.S. southeast to California, with about $936 billion of assets, 180,000 employees and 5,700 banking offices in 29 states and the District of Columbia.
Bank of America will be the third largest U.S. bank, after Citigroup Inc. (NYSE:C - news), and after J.P. Morgan Chase & Co. (NYSE:JPM - news) finishes buying Bank One Corp. (NYSE:ONE - news). Bank of America will rank No. 2 until the Bank One purchase is completed.
Kenneth Lewis, Bank of America's chief executive officer, said the company hopes to build a "broad, deep relationship" with customers that "will drive returns for shareholders."
The Federal Reserve (news - web sites) approved the combination on March 8. It estimated Bank of America will control 9.9 percent of U.S. bank deposits, just below the 10 percent maximum. Bank of America is based in Charlotte, North Carolina, and Fleet in Boston.
The merger will create a dogfight in New England for Fleet customers. BankNorth Group Inc. (NYSE:BNK - news) CEO Bill Ryan, whose bank will become the largest based in the region, and Sovereign Bancorp Inc. (NYSE:SOV - news) CEO Jay Sidhu have said they plan to win billions of dollars of business from Fleet customers.
"I want a New England bank for New Englanders," one Fleet shareholder said at that bank's shareholder meeting.
Fleet CEO Charles "Chad" Gifford said the banks will remain committed the New England community. Lewis will remain Bank of America's CEO and Gifford will become chairman.
CREDIBILITY
Bank of America, whose advertising campaign promises "higher standards," has been scurrying to restore its credibility with investors because of its roles in some financial scandals, and concern it overpaid for Fleet.
The two banks on Monday agreed to pay $675 million to settle regulatory probes into improper mutual fund trading. Bank of America last week agreed to a $10 million SEC penalty for failing to produce documents in a separate trading probe.
Italian investigators are still probing Bank of America's role in the collapse of Parmalat Finanziaria SpA (PRFI.MI).
Responding to comments from Evelyn Davis, a well-known corporate gadfly, Lewis estimated the bank had about $600 million of exposure to the food company, some of which it has written off. He added: "We have held everybody that we know was involved accountable, and they are no longer with us."
The banks plan to cut up to 13,000 jobs through layoffs and attrition, the Wall Street Journal said on Wednesday, citing unnamed people familiar with the matter.
Bank of America spokeswoman Eloise Hale said "there will be job cuts" but declined to provide a number. The banks have targeted $1.1 billion of annual cost savings by 2005.
On Wednesday morning, Bank of America shares rose 34 cents to $80.45, and Fleet shares rose 25 cents to $44.59. Bank of America shares closed at $81.86 immediately before the merger.
(Additional reporting by Philip Klein)
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