Greg Haynes
Supporting Actor
- Joined
- Oct 22, 1998
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Bank of America to Buy MBNA in $35B Deal
06.30.2005, 07:07 AM
Bank of America Corp. said Thursday it will acquire MBNA Corp., the world's top credit-card issuer, for $35 billion in cash and stock.
The deal is expected to close in the fourth quarter of 2005. Under terms of the agreement, MBNA stockholders will receive 0.5009 common shares of Bank of America plus $4.125 for each of their shares. Based on Bank of America's Wednesday closing stock price, the deal is valued at $27.50 per share, or $35 billion in total.
NYSE-listed shares of MBNA surged $5.93, or 28.1 percent, to $27 in premarket activity. Shares of Bank of America closed Wednesday at $46.91.
Bank of America said it expects to achieve overall cost savings of $850 million, which would be fully realized in 2007, and anticipates a restructuring charge of $1.25 billion. The company said 6,000 jobs will be slashed as a result of the merger, and additional savings will be achieved through the elimination of overlapping technology, vendor leverage and marketing expense.
After the deal is completed, Bank of America will be one of the leading worldwide payments services companies and issuers of credit, debit and prepaid cards based on total purchase volume.
Link to story
06.30.2005, 07:07 AM
Bank of America Corp. said Thursday it will acquire MBNA Corp., the world's top credit-card issuer, for $35 billion in cash and stock.
The deal is expected to close in the fourth quarter of 2005. Under terms of the agreement, MBNA stockholders will receive 0.5009 common shares of Bank of America plus $4.125 for each of their shares. Based on Bank of America's Wednesday closing stock price, the deal is valued at $27.50 per share, or $35 billion in total.
NYSE-listed shares of MBNA surged $5.93, or 28.1 percent, to $27 in premarket activity. Shares of Bank of America closed Wednesday at $46.91.
Bank of America said it expects to achieve overall cost savings of $850 million, which would be fully realized in 2007, and anticipates a restructuring charge of $1.25 billion. The company said 6,000 jobs will be slashed as a result of the merger, and additional savings will be achieved through the elimination of overlapping technology, vendor leverage and marketing expense.
After the deal is completed, Bank of America will be one of the leading worldwide payments services companies and issuers of credit, debit and prepaid cards based on total purchase volume.
Link to story
