Merrill protect the firm from a stunning $15.3 billion loss in the fourth quarter
On 2008, Merrill announced that it had agreed to be purchased by Bank of America, rather than run the risk of being pulled under by turmoil surrounding the industry.
After a weekend of whirlwind deal making and emergency meetings at the Federal Reserve Bank of New York, John A. Thain and his team at Merrill Lynch had sold their troubled brokerage firm to the Bank of America corporation, dodging the financial sinkhole that was swallowing Leham Brothers.
Interviews with almost 30 current and former Bank of America and Merrill executives and employees convey just how messy the merger has been. All of them asked not to be identified because they either did not have permission from the banks to speak or because they had signed confidentiality agreements with their former employers.
On one side is Mr. Thain, chairman and chief executive of Merrill Lynch, who was viewed as someone who promised far more to Merrill than he delivered. Although he has repeatedly said that he helped heal the firm’s financial wounds and its battered morale, he wound up insulating himself from most top Merrill executives and failed to protect the firm from a stunning $15.3 billion loss in the fourth quarter of last year, according to several current and former senior Merrill insiders.
Merrill revealed the rampant hubris and sense of entitlement embedded on Wall Street, foreshadowing the myriad problems that would eventually threaten the merger of the two beleaguered financial giants.
And the merger, in which Bank of America agreed to pay about $50 billion in stock for Merrill, soured at light speed. Back then, the combined companies would have been valued by the stock market at about $176 billion. Today, the combination has a market capitalization of only $39 billion.
On 2008, Merrill announced that it had agreed to be purchased by Bank of America, rather than run the risk of being pulled under by turmoil surrounding the industry.
After a weekend of whirlwind deal making and emergency meetings at the Federal Reserve Bank of New York, John A. Thain and his team at Merrill Lynch had sold their troubled brokerage firm to the Bank of America corporation, dodging the financial sinkhole that was swallowing Leham Brothers.
Interviews with almost 30 current and former Bank of America and Merrill executives and employees convey just how messy the merger has been. All of them asked not to be identified because they either did not have permission from the banks to speak or because they had signed confidentiality agreements with their former employers.
On one side is Mr. Thain, chairman and chief executive of Merrill Lynch, who was viewed as someone who promised far more to Merrill than he delivered. Although he has repeatedly said that he helped heal the firm’s financial wounds and its battered morale, he wound up insulating himself from most top Merrill executives and failed to protect the firm from a stunning $15.3 billion loss in the fourth quarter of last year, according to several current and former senior Merrill insiders.
Merrill revealed the rampant hubris and sense of entitlement embedded on Wall Street, foreshadowing the myriad problems that would eventually threaten the merger of the two beleaguered financial giants.
And the merger, in which Bank of America agreed to pay about $50 billion in stock for Merrill, soured at light speed. Back then, the combined companies would have been valued by the stock market at about $176 billion. Today, the combination has a market capitalization of only $39 billion.
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