Ambit Holdings Pvt Ltd has appointed Andrew Holland as the CEO for institutional equities and equity proprietary trading for Ambit Capital Pvt. Holland joins Ambit with extensive experience spanning over 25 years across Asia and Europe and until recently has been the managing director for equity proprietary trading for Merrill Lynch in India.
?Our investment banking division, wealth management section and equity business will now be a part of BoA. They bring with them a very strong and huge balance sheet. This collaboration is a very positive move as we get the expertise and franchise of BoA,? said an official from Merrill Lynch, who did not wish to be named.
The official said there are 60,000 employees globally in Merrill Lynch and this take-over will not affect the employees in the company.
?There will be no retrenchment,? he said. On Monday, Bank of America agreed to acquire Merrill Lynch in an all-stock transaction for a $50 billion. This combined company would have leadership positions in retail brokerage and wealth management.
By adding Merrill Lynch?s more than 16,000 financial advisers, Bank of America would have the largest brokerage in the world with more than 20,000 advisers and $2.5 trillion in client assets.
The combination brings global scale in investment management, including an approximately 50% ownership in BlackRock, which has $1.4 trillion in assets under management. Bank of America has $589 billion in assets under management.
Adding Merrill Lynch both enhances current strengths at Bank of America and creates new ones, particularly outside of the United States.
Merrill Lynch adds strengths in global debt underwriting, global equities and global merger and acquisition advice.
After the acquisition, Bank of America would be the number one underwriter of global high yield debt, the third largest underwriter of global equity and the ninth largest adviser on global mergers and acquisitions based on pro forma first half of 2008 results.
?The deadly combination of the two will create a huge business, which would be involved in fixed income trading, stock underwriting, corporate lending. This one big firm can be the biggest rival for Citibank, which is the biggest bank in the US in terms of assets,? said an analyst.
Under terms of the transaction, Bank of America would exchange 8,595 shares of Bank of America common stock for each Merrill Lynch common share. The price is 1.8 times stated tangible book value.
Bank of America expects to achieve $7 billion in pre-tax expense savings, fully realized by 2012. The acquisition is expected to be accretive to earnings by 2010.
?The transaction is expected to close by the first quarter of 2009. It has been approved by directors of both companies and is subject to shareholder votes at both companies and standard regulatory approvals,? said a BoA official.
Under the agreement, three directors of Merrill Lynch will join the Bank of America Board of Directors.