Bank of America reached an agreement to take over the American investment bank Merrill Lynch for 50 billion dollars. The official announcement was made by Bank of America. According to the joint press release of the two banks, the transaction, which will end in 2009, will create the biggest financial institution in the world.
Bank of America CEO Ken Lewis declared that the transaction is a big opportunity for the banks' shareholders. After taking over Merrill Lynch the value of the Bank of America shares will amount to 2,5 billion dollars.
Lynch is one of the financial institutions affected by the sub prime crisis that brought the company losses of over 52 billion dollars. Lynch is the third investment bank in the States after Goldman Sachs and Morgan Stanley.