Bank of America to buy FleetBoston for about $47 billion

Monday, October 27th 2003, 12:00 am
By: News On 6

BOSTON (AP) _ Bank of America Corp. has agreed to buy FleetBoston Financial Corp., in a $47 billion deal that will create the second biggest banking company in the United States.

Bank of America said Monday that its acquisition of Fleet will give it about 33 million customers and 2.5 million business clients in the United States and 34 countries.

It will be the second largest U.S. banking company in the United States in terms of assets behind Citigroup Inc., Bank of America spokeswoman Eloise Hale said.

Bank of America had been the third biggest U.S. banking company behind Citigroup with more than $1 trillion in assets and J.P. Morgan Chase & Co. with more than $740 billion in assets, according to a ranking published earlier this year by the trade publication American Banker.

The deal would combine banks with assets totaling over $930 billion, the companies said.

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 Friday.

In early trading on the New York Stock Exchange, FleetBoston shares climbed $8.27, or 26 percent, to $40.07, while Bank of America shares fell $6.78, or 8.3 percent, to $75.08.

The agreement has been approved by both boards of directors and is subject to regulatory and shareholder approval. The closing is expected in the first half of 2004.

But Connecticut Attorney General Richard Blumenthal said he was concerned by the planned merger, and promised ``strong, strict scrutiny'' to ensure the merger does not violate antitrust laws.

``Connecticut's largest bank would be devoured by the third largest bank in the nation, a dangerous step toward oligopolistic dominance, threatening competition in the banking industry,'' Blumenthal said.

Charles K. Gifford, chairman and chief executive of FleetBoston, will be chairman of the board of the merged company. Kenneth D. Lewis, chairman and chief executive of Bank of America, will be chief executive of the merged company, which will have its headquarters in Charlotte.

``This merger is about delivering the combined capabilities of two powerful organizations to our customers, shareholders and communities,'' Lewis said in a statement.

Bank of America will replace the Fleet name in the Northeast. Bank of America agreed to keep employment levels in New England at current levels.

Bank of America has $737 billion in assets and $409 billion in deposits. Fleet, based in Boston, has assets of about $196 billion. Bank of America has 133,000 employees, to 47,700 for Fleet.