BofA Completes MBNA Deal: $35 Billion Acquisition Makes Charlotte-Based Bank the Top U.S. Credit Card Company
Posted on: Monday, 2 January 2006, 09:00 CST
By Rick Rothacker, The Charlotte Observer, N.C., The Charlotte Observer, N.C.
Jan. 2--Bank of America Corp. entered the New Year as the largest U.S. credit card issuer.
The Charlotte-based bank said Sunday it completed its $35 billion acquisition of MBNA Corp., giving it a total of $140 billion in credit card balances and 20 percent market share.
"The combination of Bank of America's distribution platform and customer base with MBNA's products, affinity relationships and marketing expertise creates significant opportunities for our combined company," Bank of America Chairman and Chief Executive Ken Lewis said in a statement.
To make the deal profitable to shareholders, the nation's No. 2 bank is looking to reduce expenses by $850 million by the end of 2007. As part of this cost cutting, Bank of America has said it will eliminate 6,000 jobs, about 3 percent of the combined workforce.
The bank hasn't said when cuts will begin or what locations will be affected. Charlotte has a minimal amount of credit card operations.
Bruce Hammonds, MBNA's chief executive officer, becomes president of Bank of America Card Services, based in Wilmington, Del. Former MBNA vice chairman Frank Bramble Sr. will join Bank of America's board of directors this month.
In the merger, MBNA stockholders will receive 0.5009 of a share of Bank of America common stock and $4.125 in cash for each share of MBNA common stock. Bank of America shares closed Friday at $46.15, down 4 cents.
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Copyright (c) 2006, The Charlotte Observer, N.C.
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Source: The Charlotte Observer (Charlotte, N.C.)
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