News

Bank of America, FleetBoston to merge in blockbuster deal

October 27, 2003

BOSTON - Bank of America Corp. has agreed to buy FleetBoston Financial Corp. in a $47 billion deal that will create the second largest banking company in the United States, The Associated Press reported.

The deal will give Bank of America about 33 million customers and 2.5 million business clients in the United States and 34 countries. The combined operation will have 16,551 ATMs at its customers' disposal.

With combined assets of about $930 billion, the new company will be second only to Citigroup Inc., which has assets of more than $1 trillion. J.P. Morgan Chase & Co., with assets of more than $740 billion, is the third largest banking company.

"It's going to be one of the dominant banks in the U.S. banking industry over the next 24 years," Gerald Cassidy, an industry analyst with RBC Capital Markets told the news service.

Bank of America, based in Charlotte, N.C. will pay $45 a share for Fleet in an all-stock deal, a premium of more than 41 percent over FleetBoston's closing price on Oct. 24.

In midday trading on the New York Stock Exchange Oct. 27, FleetBoston shares climbed $7.94, or 25 percent, to $39.74, while Bank of America shares fell $7.90, or 9.7 percent to $73.96.

The merger offers FleetBoston an opportunity to expand beyond its regional base and gives Bank of America a presence in the wealthy Northeastern region of the country.

"We are now truly the bank of America," said Kenneth D. Lewis, chairman and chief executive of Bank of America, who will be chief executive of the merged company, to be headquartered in Charlotte.

Charles K. Gifford, chairman and chief executive of FleetBoston, will be chairman of the board. Bank of America will replace the Fleet name in the Northeast and Bank of America agreed to keep employment level at current levels in the Northeast.

The merger must be approved by both boards of directors and is subject to regulatory approval.