Bank of America merger with FleetBoston OK'd

CHARLOTTE, N.C. -- FleetBoston Financial Corp. and Bank of America Corp. shareholders approved a $47 billion merger Wednesday that would create the nation's No. 3 bank -- and reportedly result in up to 13,000 job cuts.

More than 67 percent of Bank of America shareholders approved the deal in a meeting that lasted less than an hour. At a FleetBoston meeting held at the same time, 98 percent of shareholders gave their blessing to the merger, which is expected to be completed in April.

"When this merger closes, Bank of America will have an unrivaled market position in America's growth and wealth markets," said Bank of America chief executive Kenneth D. Lewis, who will hold the same position at the combined bank, which will retain the Bank of America name. Current FleetBoston CEO Chad Gifford will be chairman.

The approvals had been widely expected following last week's decision by the Federal Reserve that the merger was not anticompetitive and would not create too much concentration of banking resources.

With about 5,700 branches, the new bank's footprint will reach from California through the South and up to New England, with assets estimated at $966 billion -- trailing only Citigroup and another planned mega-merger between Chicago-based Bank One and J.P. Morgan Chase.

In trading Wednesday, FleetBoston shares gained 25 cents to $44.59 on the New York Stock Exchange, where shares of Bank of America advanced 35 cents to $80.46.

A Bank of America spokeswoman said Wednesday she could not confirm a Wall Street Journal story that the bank plans to cut up to 13,000 jobs after completing the acquisition. The cuts would come through layoffs and attrition from the operations of both banks and amount to about 7 percent of their combined work force of 181,000, the newspaper said, quoting unidentified people it said were familiar with the plans.

Last week, an analyst predicted that Bank of America might have to cut as many as 11,000 jobs to attain the level of cost reductions pledged by Lewis. Lewis has said he expects to achieve about $1.6 billion in cost savings by the end of 2005.

The bank has said that cutting jobs is necessary to give investors the kind of returns they expect to see from such a large merger.

Wednesday's meetings were relatively quiet affairs -- a contrast with the regulatory hearings held by the Federal Reserve in San Francisco and Boston in January to determine whether the deal was in the public's interest. Hundreds of people attended those meetings and opponents of the deal argued it would hurt consumers.

The Bank of America meeting drew questions from only two shareholders, including Evelyn Y. Davis of Washington, D.C., a shareholder activist who told Lewis she opposed the merger.

"This is not going to work because there is too much of a difference in culture, unless you step right in, Ken, and get rid of some FleetBoston people," she said.

The FleetBoston meeting was also brief and sedate.

The vote comes two days after Bank of America and FleetBoston Financial agreed to pay a total of $515 million to resolve allegations of improper mutual fund trading and to reduce fees investors pay by $160 million in the biggest fund scandal settlement to date.

Regulators had alleged that the banks allowed improper trading that benefited big-ticket clients at the expense of long-term shareholders.

As part of the tentative agreement announced Monday, eight members of the board of directors of Nations Funds, Bank of America's group of mutual funds, will be required to resign their positions within a year for their alleged role in allowing the trading violations.

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On the Net:

Bank of America Corp.: http://bankofamerica.com

FleetBoston Financial Corp.: http://www.fleet.com