An analyst report from Merrill Lynch was clear-cut: Bank of America (NYSE:BAC) is "likely" to make a bid for Barclays (NYSE:BCS). Simply put, it would be a stellar combination. In fact, the deal could see a juicy premium of 25% to 30% (making the price tag a whopping $117 billion).
Basically, Bank of America is running out of room for growth in the US (this is actually the result of federal regulatory caps). Thus, the firm needs to look at non-bank services – such as with its deal to buy US Trust – or push overseas.
And, yes, a Barclays deal would certainly boost Bank of America's global footprint. In fact, Bank of America would be the world's biggest bank (hey, maybe change the name to "Bank of the World"?)
What's more, the deal would provide Bank of America with a extensive investment banking operation. Basically, corporate clients want a global platform – and Barclays would definitely provide that.
Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.
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Reader Comments (Page 1 of 1)
12-08-2006 @ 3:42PM
Steve Saker said...
This deal, if consummated, will be exactly as stinky as Daimler-Chrysler was for many years. The cultures will not mesh. Bad blood will be created as jobs are lost. The "savings" will be a mirage.
Not to say that some won't make money in the short-term as barclays comes into play.