Fleeting glimpse

27 October 2003 By Rob Cox Follow @rob1cox

By paying a premium worth $12bn, the US giant hopes to keep Citigroup at bay. But it won’t create much value. Still, compared to its rumination of a foreign bank takeover, BofA’s purchase of Fleet makes some sense.

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Bank of America has agreed to buy FleetBoston Financial Corporation for $47bn in an allstock deal.

FleetBoston Financial stockholders will receive 0.5553 shares of Bank of America common stock for each of their shares. The exchange ratio was derived from the share price of Bank of America at the close of business on 22 October, to value FleetBoston at $47bn, or $45 per share.

Charles Gifford, chairman and chief executive officer of FleetBoston, will be chairman of the board of directors of the enlarged company. Kenneth Lewis, chairman and chief executive officer of Bank of America, will be chief executive officer.

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