After dropping out of the race to buy Lehman Brothers Sunday afternoon, Bank of America switched to Merrill Lynch , acquiring the financial giant to the tune of $44 billion, or $29 a share.
The price is well above where Merrill was trading recently.
Merrill is a winner, or Merrill shareholders are.
In the long term, BofA shareholders may be, but, with the amount of debt and purchases the company has made recently, I don’t know about the short term.
The takeover comes on the heels of buying Countrywide earlier this year.
And, it’s not the first time BofA has acted swiftly. As the story notes, it bought MBNA (the card company, not the senator and Veep candidate) in 2005 on a week’s notice.
Finally, is it good for the consumer? Or the country as a whole?
Well, BofA is going to give you a vomitorium Yes answer to that, touting mortgages, investment banking, commercial banking and more all under one roof.
I’m not so sure about agglomeration of this size. What if some CEO of the future, in some future subprime mortgage-type bubble, overextended an institution of this size?
No comments:
Post a Comment