Case Analysis Bank of America’s Acquisition of Merrill Lynch

timer Asked: Dec 31st, 2017
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Question description

Case Analysis: Bank of America’s Acquisition of Merrill Lynch

Read the case, “Bank of America’s Acquisition of Merrill Lynch” on page 702-718. Use the case analysis format provided below to address to identify the problems and provide several suggested solutions that the Bank of America executive team can review for possible implementation.

Be sure to identify "identify 2 to 3 problems" and "develop 2 to 3 possible solutions to the problems identified", and use this as the focus for making your case in the case format. Note: The case questions provided at the end of each case can be used as an insight to what the problems might be; so be sure to investigate the case carefully.

Case Format

I. Write the Executive Summary

  • One to two paragraphs in length
  • On cover page of the report
  • Briefly identify the major problems facing the manager/key person
  • Summarize the recommended plan of action and include a brief justification of the recommended plan

II. Statement of the Problem

  • State the problems facing the manager/key person
  • Identify and link the symptoms and root causes of the problems
  • Differentiate short term from long term problems
  • Conclude with the decision facing the manager/key person

III. Causes of the Problem

  • Provide a detailed analysis of the problems; identify in the Statement of the Problem
  • In the analysis, apply theories and models from the text and/or readings
  • Support conclusions and /or assumptions with specific references to the case and/or the readings

IV. Decision Criteria and Alternative Solutions

  • Identify criteria against which you evaluate alternative solutions (i.e. time for implementation, tangible costs, acceptability to management)
  • Include two or three possible alternative solutions
  • Evaluate the pros and cons of each alternative against the criteria listed
  • Suggest additional pros/cons if appropriate

V. Recommended Solution, Implementation and Justification

  • Identify who, what, when, and how in your recommended plan of action
  • Solution and implementation should address the problems and causes identified in the previous section
  • The recommended plan should include a contingency plan(s) to back up the ‘ideal’ course of action
  • Using models and theories, identify why you chose the recommended plan of action – why it’s the best and why it would work

VI. External Sourcing

  • 2 to 3 external sources (in addition to your textbook) should be referenced to back up your recommendations or to identify issues. This information would be ideally sourced in current journals, magazines and newspapers and should reflect current management thought or practice with respect to the issues Identify.

The requirements below must be met for your paper to be accepted and graded:

  • Write between 750 – 1,250 words (approximately 3 – 5 pages) using Microsoft Word in APA style, see example below.
  • Use font size 12 and 1” margins.
  • Include cover page and reference page.
  • At least 80% of your paper must be original content/writing.
  • No more than 20% of your content/information may come from references.
  • Use at least three references from outside the course material, one reference must be from EBSCOhost. Text book, lectures, and other materials in the course may be used, but are not counted toward the three reference requirement.
  • Cite all reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) in the paper and list on a reference page in APA style.

References must come from sources such as, scholarly journals found in EBSCOhost, CNN, online newspapers such as, The Wall Street Journal, government websites, etc. Sources such as, Wikis, Yahoo Answers, eHow, blogs, etc. are not acceptable for academic writing.

Tutor Answer

School: Boston College

Hello😎 ,Attached find is the completed work. I did a thorugh research on the assignment and hopefully i attained the correct answers. Have a look at it and let me know how you feel about it.Thanks and all the best.


BOA’s Acquisition of Merrill Lynch
Institutional Affiliation




BOA’s Acquisition of Merrill Lynch
Executive Summary
The main point of this case is that it summarizes the aspect behind the acquisition of
Merrill Lynch by the Bank of America which is identified as the top global wealth management
firm. Merrill Lynch was at the edge of collapsing due to the global financial crisis. During the
financial crisis that was evident in 2007, many of the investment banks not to forget Merrill
Lynch experienced high levels of losses due to the poor financial situations at that particular
time. One of the major difficulties that Merrill Lynch faced was that the value of CDOs was
dropping and this actually forced Merrill Lynch to indicate all of their valuations.
The increase of these losses threatened the existence of Merrill Lynch. It was a major
concern by the management of Merrill Lynch because their market share had dropped to around
35% (Acharya et al., 2017). As this was a major concerned with the management of Merrill
Lynch, they recommended that the only way to survive is by improving the process of
acquisition of Merrill Lynch to the BOA. At least the acquisition process will help to prevent and
resolve the financial issues that were facing Merrill Lynch.
Statement of the Problem
The major concern of the management of Merrill Lynch was that of the problem of losses
that Merrill Lynch was facing and such losses included such things as the loss of the
representations and warranties that were presented in relation to the sales of the securities and the
loan products. The reduction of the valuation of the shares was a great problem in the sense that
the only option that remained was an acquisition by the BOA. Another major issue was that the



BOA was highly concerned with how Merrill Lynch did not fully disclose the losses that it had
experienced. A good example is where the BOA questioned the losses that were recorded by
Merrill Lynch Company.
The primary symptoms and causes of the acquisition difficulties were the global financial
crisis major concern. As the global financial crisis increased it was a major situation that elevated
the problem of Merrill Lynch and actually led to a great level of losses that was experienced by
the Merrill Lynch CDOs. The lack of full disclosure of the losses experienced by Merrill Lynch
was another major problem which hindering the process of acquisition by the BOA to be
The main difference that existed between the long term and the short term problems in
the acquisition process of Merrill Lynch was that the problem that existed in the short term
included the incapacity to validate the purchasing price of the company. Before BOA had
purchased the firm they had previously raised the issues concerning the losses that Merrill Lynch
Company had faced. The long-term problems that existed included such things as the global
financial crisis that was facing Merrill lynch which could easily undermine the success of the
BOA when it comes to dealing with Merrill Lynch as part of their company (Acharya et al.,
2017). In conclusion to this, it is important that the managers of Merrill Lynch should rewrite the
share before they engage in the acquisition process by the BOA.
Cause of the Problem
Lehman Brothers who were the owner of Merrill Lynch were very concerned about the
failure of the company. However, this case shows the problems that were experienced in the
process of acquisition by the BOA. The CEO of Merrill lynch “John Thain” had made a


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