Merrill Lynch Case Study

794 Words4 Pages
The financial crisis of 2008 posed significant problems to the economy and financial markets. Many banks recorded bankruptcy while others such as Merrill Lynch were losing money at an astonishing rate. In the bid to save itself from this situation, Merrill Lynch back agreed on a merger acquisition with the Bank of America. Significant problems arose regarding the deal as Merrill Lynch bank was indicating a loss, leading to the possibilities of termination of the deal by the Bank of America. In response to this, the federal governments made several threats to the Bank of America in case it decides to go ahead with the decision to terminate the deal. Notably, it was apparent that terminating the deal would only worsen the financial situation in the markets. In this manner, the bank faced threats from the government because of its decision to invoke a MAC on the merger deal. Secondly, the bank faced a lawsuit from shareholders and investors who claimed that the bank was not transparent on the intricate details of the merger. In order to mitigate the problems, the bank decided to go ahead and close the deal. Moreover, the Bank of America had to resort to paying a settlement to its investors and shareholders. Case Analysis: Bank of America’s Acquisition of Merrill Lynch Statement of Problem Two problems are apparent in the Bank of America’s Acquisition of Merrill Lynch case. First, the Bank of America and Merrill Lynch agreed on a merger deal in times when the latter was
Open Document