BOSTON -- FleetBoston Financial is being swallowed up by Bank of America in a deal worth billions of dollars, the companies announced Monday.
NewsCenter 5's Amalia Barreda reported that with the acquisition of Fleet, Bank of America will have about 33 million customers and 2.5 million business clients in the United States and 34 other countries.
The Bank of America deal makes it Christmas in October for Fleet stockowners, since Bank of America is paying $45 per share for Fleet in an all stock buy-out.
It is a 40 percent premium over the stock's closing price on Friday. The sale also means the end of an era in New England banking since Fleet is the last of the big Boston-based banks.
The merger announcement was made with lots of smiles and handshakes in New York Monday morning.
With the buyout valued at $47 billion, the Fleet name will disappear from New England to be replaced by Bank of America.
Kenneth D. Lewis, chairman and chief executive of Bank of America, said the merger had the potential to be something very special.
"In my mind, the truly compelling argument for this merger is the long-term vision for a truly national bank -- a bank that will create the opportunity for Americans across the country to choose the unprecedented convenience, quality and innovation that we can provide," Lewis said.
The merger will make Bank of America the second largest financial institution in the country behind Citibank. Bank of America claims its assets are $737 billion, which will be combined with FleetBoston's assets of $190 billion.
"It is the premiere institution. Furthermore, it is a very rich area in per capita income," FleetBoston's CEO Chad Gifford said. "We will prove sooner, rather than later, that this is a terrific transaction."
How Will Merger Affect Local Jobs?
A major concern for New England is how the merger will affect area jobs.
NewsCenter 5's Janet Wu reported that Bank of America employs 133,000 people, and FleetBoston employs nearly 48,000 people.
Gifford said it was too early to talk about job cuts, but said that current employment levels have been guaranteed -- meaning customer service will stay intact.
"The understanding, and (Lewis) is a man of his word, is that employment in New England will stay flat. That's not to say people will not lose their jobs, people will," said Gifford.
Gifford will become board chairman of the new company, and Lewis will remain chief executive.
Gov. Mitt Romney met with bank officials to discuss the pending merger Friday afternoon.
"My concern is when you see two banks come together, you see a lot of jobs go away. I want to make sure that in this case, that we do our very best to keep every job we can in Massachusetts and New England. Bank of America has assured us they will do that but want to hear that directly from them and that is why I am meeting with them this afternoon," said Romney.
The sale of FleetBoston also means area residents will have to get used to a new name on banks and major buildings. Most obvious is the FleetCenter, home of the Celtics and Bruins, and the site of next summer's Democratic National Convention.
Officials say the name of that building will likely be changed, as will that of the FleetBoston Pavilion on the waterfront, which hosts concerts every summer.
FleetBoston branches will become Bank of America outlets, but they are expected to remain in their current locations.
There's no word on when the names will be changed.
The merger still needs the expected approval of shareholders, and it must go through the regulatory approval. Both are expected to take at least six months.
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CEOs Talk About Merger
