MOT Assignment- I Sona Saran 119278054 Merrill Lynch - Sale to Bank of America

Merrill Lynch, an independent financial advisory company before its acquisition by Bank of America in January 2009 has now become the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. It

agreed to be purchased by Bank of America on September 14, 2008 at the height of 2008 financial crisis.
There were huge losses because of the drop in value of its large mortgage portfolio in the form of Collateralized Debt Obligations. Its trading partners lost confidence in Merrill Lynch's ability to refinance short-term debt. When Lehmann brothers files bankruptcy as government officials could not find a merger partner for it, Bank of America announced it was in talks to purchase Merrill Lynch for $38.25 billion in stock. Merrill Lynch was sold to Bank of America for 0.8595 shares of Bank of America common stock for each Merrill Lynch common share, or about US$50 billion or $29 per share. This price represented a 70.1% premium over the September 12 closing price or a 38% premium over Merrill's book value of $21 a share, but that also meant a discount of 61% from its September 2007 price. Congressional testimony by Bank of America CEO Kenneth Lewis, as well as internal emails released by the House Oversight Committee, indicate that Bank of America was threatened with the firings of the management and board of Bank of America as well as damaging the relationship between the bank and federal regulators, if Bank of America did not go through with the acquisition of Merrill Lynch.

Facebook
Facebook is the worlds most used social networking website, founded by Mark Zuckerberg in February 2004 alongwith Eduardo Saverin, Dustin Moskovitz and Chris Hughes.Initially its membership was open only to Harvard students but eventually it was made open to anyone above the age of 13. In June 2004, Facebook moved its base of operations to Palo Alto, California. It received its first investment later that month from PayPal co-founder Peter Thiel. The company purchased the domain name facebook.com in 2005 for $200,000. On October 24, 2007, Microsoft announced that it had purchased a 1.6% share of Facebook for $240 million, giving Facebook a total implied value of around $15 billion. Microsoft's purchase included rights to place international ads on Facebook. In October 2008, Facebook announced that it would set up its international headquarters in Dublin, Ireland. In September 2009, Facebook said that it had turned cash-flow positive for the first time. In November 2010, based on SecondMarket Inc., an exchange for shares of privately held companies, Facebook's value was $41 billion (slightly surpassing eBay's) and it became the third largest U.S. Web company after Google and Amazon. Facebook has been identified as a possible candidate for anIPO by 2013. The Wall Street Journal has reported that Facebook is looking to raise as much as $10 billion in its IPO.