Bank of America Merrill flexes M&A muscle

A Bank of America logo is seen before the corporate center in Charlotte, North Carolina January 19, 2010.

LONDON (Reuters) - The thundering herd is bucking and snorting again, if not quite stampeding in mergers and acquisitions.

Bank of America Merrill Lynch (BAC.N) has gained a bigger slice of dealmaking, and a series of high-profile hires means it is well placed for further growth in Europe and Asia-Pacific.

The acquisition of sub-prime mortgage casualty Merrill Lynch gave Bank of America a meaningful and long-coveted overseas investment bank shortly after Lehman's demise in late 2008.

The early marriage was tumultuous, however, as the Charlotte, North Carolina-based lender was forced to seek $20 billion of emergency capital from the Federal Reserve to cover escalating losses at its new subsidiary.

But the combination of Bank of America's balance sheet and senior hires from rivals has started to deliver results.

"We are not throwing our balance sheet around, but we are using it more aggressively for clients than we did six months ago. This is part of our strategy to increase overall investment banking market share," said Christian Meissner, head of investment banking for Europe, Middle East and Africa, who joined in August from Nomura (8604.T).

In private, competitors are already taking note.

"The sense was that it was going to get run out of North Carolina, that BofA would not let these (M&A) guys run their businesses entrepreneurially," said a senior London mergers banker, who declined to be named when discussing a rival.

"The reality is they seem to be focusing again and paying attention to the business."

BofA Merrill has worked on 170 transactions worth $257 billion, making it the fifth most active adviser globally, according to Thomson Reuters preliminary data. That compares with a number-eight placing a year ago.

While Merrill's U.S. business remained static, its work with European and Asia-Pacific companies expanded to drive an overall increase in advisory work.

"I am pleased with the firm's progress in M&A this year, but we can improve on this," said Meissner.

"We aim to be in a top three position globally, as well as in the U.S., Europe and Asia individually, within the next couple of years. Our overall goal is to be the leading corporate and investment bank in the world."

INTERNATIONAL EXPANSION

BofA Merrill led deals worth $141 billion involving a European target or acquirer, making it the fourth-busiest company in this category, up from tenth last year.

It is advising British pay-TV group BSkyB (BSY.L) on a $12 billion takeover offer by Rupert Murdoch's News Corp (NWSA.O).

Its work with Asia-Pacific targets or acquirers let it jump to second place from 17th in the region, fueled by high-profile mandates, including advising Australia's Newcrest Mining (NCM.AX) on the $8.5 billion acquisition of Lihir Gold LGL.AX.

The bank is also advising Korea National Oil Corp, which has just gained 64 percent control of British oil explorer Dana Petroleum, paving the way for the biggest hostile acquisition by a South Korean firm.

Meissner is already building for future growth with three senior hires in his short time with the bank.

"We have still got some more hires to make next year, but I would say overall that the bulk of our senior recruitment for 2010 has been done," he said.

An old Nomura colleague, Adrian Mee, will join BofA Merrill in December to lead international M&A.

As Nomura's top European mergers and acquisitions banker, Mee advised Britain's International Power Plc IPR.L on a tie-up with GDF Suez SA (GSZ.PA) of France.

Antonin Baladi will join in December from Nomura, and Joseph Belan arrives in November from Pala Investments.

Other recent hires include Julian Mylchreest as co-head of global energy and power, and Rob Firth, who joined from Deutsche Bank and will head up EMEA financial sponsor coverage.

Among the immediate losses following the merger, global head of energy and power Jonathan Grundy decamped to Credit Suisse in March 2009.

Caroline Silver, a former chairman of European investment banking, left around the same time to join independent investment bank Moelis.

(Additional reporting by Quentin Webb; editing by Steve Orlofsky and Michael Shields)