| Bofa 47b merger seals deal { March 18 2004 } Original Source Link: (May no longer be active) http://www.newsday.com/business/local/newyork/ny-bzbank183711474mar18,0,1555717.story?coll=ny-nybusiness-headlineshttp://www.newsday.com/business/local/newyork/ny-bzbank183711474mar18,0,1555717.story?coll=ny-nybusiness-headlines
FLEET- BANK OF AMERICA MERGER: $47 billion seals the deal BY PRADNYA JOSHI STAFF WRITER
March 18, 2004
Amid reports of thousands of pending layoffs, especially in the Northeast, Bank of America Corp. and FleetBoston Financial Corp. shareholders yesterday overwhelmingly approved a $47-billion merger to create the nation's third largest lender.
About 98 percent of Fleet shares and 67 percent of Bank of America shares were voted in favor of the deal, which has been approved by the Federal Reserve and Justice Department.
The combined Charlotte, N.C.-based company - Bank of America - will reach from New England, through the South, and to California, with a network of 5,700 branches, and estimated assets of $966 billion. The transaction should be completed late next month.
A favorable vote by shareholders lent new focus to the possibility of job cuts, particularly in New England, where Fleet is the dominant bank. Fleet also has 3,500 employees in New York City and Long Island - including hundreds of administrative workers at an office in Melville - while Bank of America has 3,000 employees in the New York-area.
"This merger doesn't serve the public interest," said Matthew Lee, executive director of Inner City Press, a New York City financial activist group, which has opposed the merger.
The Wall Street Journal, citing unnamed sources reported in yesterday's editions that 13,000 jobs - about 7 percent of the combined company's 181,000-member work force - will be eliminated through layoffs and attrition as part of the merger. Bank of America officials yesterday declined to confirm the figure but said they did expect job losses.
But Bank of America chief executive Kenneth D. Lewis, who will run the new company, has said he expects to wring about $1.6 billion in cost savings out of the new company by the end of next year.
"Employment levels will drop in the short-term but over time, we do expect them to grow," said Eloise Hale, spokeswoman for Bank of America. Hale said no decisions had been made on New York-area employment. But the units remaining in Boston include those handling commercial lending, small-business banking, wealth management and banking for wealthy customers.
Fleet, unlike Bank of America, maintains extensive retail branches in the New York metro area. Bank of America does have operations in Manhattan including investment banking, mutual funds, private banking for wealthy clients and global treasury services, which manage cash for corporations.
The merger also comes as Bank of America and the Durst Organization, one of the nation's largest developers, are building One Bryant Park, a 2.1-million-square-foot complex at Sixth Avenue and 42nd Street. New York City has committed to providing tax incentives for the project under the condition that new jobs are added over the next 10 years.
While there will be some cuts in back-office processing, Fleet doesn't have the extensive investment banking arm or small-business and middle-market lending operations in New York, so those jobs will probably stay, said Charles Wendel, president of the banking consulting firm Financial Institutions Consulting.
"If anything, Bank of America has a challenge in retaining long-term Fleet employees who've been through one acquisition too many," Wendel said. Copyright © 2004, Newsday, Inc.
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