According to the companies, the agreement has been approved by both boards of directors and is expected to close during the first half of 2004. Under the agreement, FleetBoston stockholders will receive .5553 shares of Bank of America common stock for each of their shares.
The announcement claimed that the merged company will serve approximately 33 million customers and will enjoy a leading market share in many areas of the US including the Northeast, Southeast and West. The new Bank of America will have $68 billion in shareholders’ equity and the two companies have generated $10 billion in earnings in the first nine months of 2003.
That will make the merged entity the second largest bank in terms of assets.Bank of America is currently number three bank by assets, while FleetBoston ranks number seven. The combined company displaces J.P. Morgan Chase & Co. in the number two spot and will rank behind industry leader Citigroup.
FleetBoston chairman and chief executive officer Charles Gifford will be chairman of the merged company and will be based in Boston. Bank of America chairman and chief executive officer Kenneth Lewis will be chief executive officer of the merged bank and will work out of the combined company’s Charlotte headquarters.
The combined company will have 9.8% of the US banking deposits and have the first, second or third largest market shares in 21 of the 29 states in which it operates. It will feature almost 5,700 retail banking offices, more than 16,500 ATMs, online and electronic bill pay services and 24-hour telephone banking.
In wealth management, Bank of America will operate the largest private bank in the United States and the third largest bank-owned brokerage. With $470 billion in assets under management, the wealth management business will be the ninth largest in the country.