Bank of America-Merrill Lynch Harvard Case Solution & Analysis

In September 2008, as Lehman Brothers struggled to survive, John Thain, director of Merrill Lynch, realized that the bank was on the brink of failure. Over the weekend 13-14 September 2008, Thain has successfully made a deal with Ken Lewis, CEO of Bank of America, BofA Merrill purchase. However, during the fourth quarter of 2008, the financial condition Merrill deteriorated at an alarming rate, with expected losses 4Q08 balloon from $ 5.3 billion in November to more than $ 12 billion by the middle of December. Shareholders of both companies approved the deal Dec. 5, 2008, but soon after, Lewis called fed officials and announced that he would refer to paragraph MAC, to get out of the deal if the Fed to receive state financial aid. Fed instructed Lewis to "stand down" and not to refer to paragraph MAC. As he called a council December 22, 2008, Lewis was a decision. Does it need to close the deal "for the good of the country?" Or should he declare MAC and exit from the transaction, potentially causing the wrath of the U.S. government. Was there another way? "Hide
by Guhan Subramanian, Nithyasri Sharma Source: HBS 17 pages. Publication Date: Mar 02, 2010. Prod. #: 910026-PDF-ENG

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