Companies decide to merge and acquire competition for several reasons, and one industry that has seen a lot of it over the past few decades is the banking industry.
Mergers and acquisitions have become the most frequently used methods of growth for companies, as they present a solution with a potentially larger market share, opening it up to a more diversified market.
Bank of America’s mergers and acquisitions have been quite important in the evolution of the company, which was built over 200 years ago. In fact, these significant events provided the base of the rapid growth of the company and contributed tremendously in achieving the position Bank of America holds in today’s banking industry.
With the globalization of the world economy, Bank of America is growing by merger and acquisition deals in an effort to expand operations and remain competitive. Banks are facing an increasingly competitive business environment, which is pushing them to constantly improve services and increase efficiency.
Bank of America went through a number of merger and acquisition deals to reach its present status. Important mergers and acquisitions include:
- In 1997, Montgomery Securities, an investment bank led by Thom Weisel, was acquired by Nations Bank. One year later, Nations Bank made an acquisition deal with Bank America. Considered the largest bank acquisition of that period, the combined entity changed its name to Bank of America.
- In 2004, Bank of America acquired the National Processing Company, creating the nation’s second-largest merchant acquirer. It represented approximately one of every five VISA® and MasterCard® transactions processed nationally.
- In the same year, Bank of America completed its merger with FleetBoston Financial, delivering unmatched convenience and advantage to more than 35 million households and businesses across the nation.
- In 2005, Bank of America announced its plan to acquire MBNA, the country’s third-largest credit card issuer, for approximately $25 billion in cash and stock. The acquisition took place in 2006 after getting the approval from the Federal Reserve Board.
- In 2007, Bank of America made a historic acquisition deal by completing its purchase of LaSalle Bank Corporation, LaSalle Corporate Finance, and ABN Amro North America.
- Bank of America substantially expanded its Chicago and Michigan presence by adding LaSelle’s 1.4 million retail customers, 400 banking centers, 17,000 commercial banking clients, and 1,500 ATMs.
Thanks to its history of significant acquisitions and mergers, Bank of America continues to be a leader in the financial world today.