BlackRock to gain from Merrill deal: analyst

BOSTON (Reuters) - U.S. asset manager BlackRock Inc will benefit from the planned takeover of its biggest shareholder, Merrill Lynch & Co Inc, according to Wachovia Capital Markets.

The takeover by Bank of America Corp will bring stability to BlackRock, the biggest publicly traded U.S. money manager, by removing the threat of a sale by Merrill of its 45 percent stake to raise capital, Wachovia analyst Douglas Sipkin wrote on Monday.

"With BlackRock shares soon to be in the hands of a more stable institution, the fear of a rushed sale, as was the case in July, has abated," Sipkin wrote. BlackRock will also benefit from "access to a larger distribution platform" after the acquisition, the analyst said.

Merrill agreed to be bought by Bank of America Corp in a $50 billion stock deal, as the brokerage sought to avoid a fate similar to the one suffered by rival Lehman Brothers Holdings Inc. Lehman filed for bankruptcy protection on Monday.

BlackRock shares were under pressure at the end of the second quarter on worries that Merrill's deteriorating financial position due to the credit crisis would lead it to unload its stake.

Merrill said in mid-July it had decided not to sell its stake in the asset manager, but concerns remained as the credit crisis worsened.

BlackRock shares closed down 1 percent at $201 on Monday in a very weak overall market.

New York-based BlackRock managed $1.43 trillion in assets as of end-June.

(Reporting by Muralikumar Anantharaman; editing by Jeffrey Benkoe)