Bank of America Corp. said Thursday it plans to acquire MBNA Corp. in a $35 billion cash and stock deal.
MBNA, Wilmington, Del., is one of the largest stand-alone credit card issuers in the world. Bank of America Corp., Charlotte, N.C., is the second-largest bank in the country in terms of assets.
The transaction values MBNA at $27.50 per share. MBNA shareholders will receive 0.5009 of a Bank of America share plus $4.125 in cash for each MBNA share.
MBNA shares were up 27% after the announcement, gaining $5.31 to $26.38 in early trading on the New York Stock Exchange. The company's shares peaked at $28.78 in March 2004.
The planned purchase would make Bank of America a formidable rival to Citigroup Inc. and JPMorgan Chase & Co. in credit cards. It also would result in 6,000 job cuts at Bank of America.
Bank of America Corp. is led by Chief Executive Officer Kenneth Lewis.
MBNA President and CEO Bruce L. Hammonds would become CEO and president of Bank of America Card Services and report to Liam E. McGee, president of Bank of America global consumer and small business banking. Another move involves Frank P. Bramble, Sr., a vice chairman of MBNA, who will be appointed to the Bank of America's board of directors.
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