Bank of America Corp., Charlotte, N.C., said it planned to acquire FleetBoston Financial Corp., Boston, for $47 billion in stock, or about $45 per FleetBoston share. After the announcement, a decline in BoAs stock price brought the value of the deal down to about $43 billion.
Both companies have a presence in the bank-insurance market. BoA is one of the companies that fought to tear down the legal barriers that once kept banks out of insurance sales and underwriting.
BoAs Bank of America N.A. subsidiary generated about $101 million in insurance commission income and $686 million in revenue from mutual fund and annuity sales in 2002, according to the Bank Insurance Market Research Group, Mamaroneck, N.Y. The firms Singers Bank Insurance and Investment Data report shows that Bank of America brought in about $300 in insurance commissions in 2002 for every $1 million in deposits.
FleetBostons Fleet N.A. Bank unit generated $58 million in insurance commission income and $405 million in revenue from mutual fund and annuity sales in 2002. Singers Bank Insurance and Investment Data report shows Fleet brought in about $500 in insurance commissions for every $1 million in deposits. FleetBoston also sells insurance through its Quick & Reilly securities brokerage unit.
FleetBoston has $196 billion in assets. Bank of America, which has $738 billion in assets, would make Charles Gifford, current chairman of FleetBoston, chairman of the combined company, but the headquarters of the combined company would be in Charlotte, BoA says.