Bank of America CEO gets his prey, with Merrill

NEW YORK (Reuters) - Kenneth Lewis's seven-year tenure at the helm of Bank of America Corp has been marked by big, audacious, complicated acquisitions.

Buying Merrill Lynch & Co may top them all.

Lewis's plan to buy Merrill in a $50 billion all-stock transaction cements his reputation as one of the most aggressive acquirers in corporate history, with well over $150 billion of acquisitions.

In that sense, the 61-year-old Lewis proved a worthy successor to Hugh McColl, who was known as 'Huge' for his deal making. That included the $43.1 billion purchase in 1998 of BankAmerica by his NationsBank, which created Bank of America.

"The Merrill acquisition meets three of Ken Lewis' key requirements for acquisitions: brand, scale, and best in class franchise," wrote Oppenheimer & Co analyst Meredith Whitney.

Assuming no problems with antitrust regulators, the addition of Merrill would turn Charlotte, North Carolina-based Bank of America into a behemoth.

Bank of America was already by far the biggest U.S. retail bank, with more than 6,100 branches and about one in every 10 U.S. dollars on deposit. It was also the largest credit card issuer and home equity loan provider.

The bank said adding Merrill would make it the largest U.S. brokerage, with more than 20,000 financial advisers and $2.5 trillion of client assets.

It will also give Bank of America a far bigger investment bank, less than a year after trading losses led Lewis to say he had "had all of the fun I can stand in investment banking". Lewis later said he regretted that comment because it raised a question about his commitment to the business.

Wealth management assets would also soar, and Bank of America would assume Merrill's nearly one-half stake in BlackRock Inc, the powerful asset manager.

"It catapults Bank of America into positions of strength in three businesses where they were weak," said James Ellman, a portfolio manager at SeaCliff Capital in San Francisco.

The purchase comes just 11 weeks after Lewis paid $2.5 billion for Countrywide Financial Corp, the largest U.S. mortgage provider. The quick turnaround suggests Lewis believes he can handle credit losses at both Countrywide and Merrill.

Bank of America is the second-largest U.S. bank by assets, with roughly $1.9 trillion, but the largest by market value, at about $154 billion. With Citigroup Inc downsizing, Bank of America would become the largest U.S. bank, by far.

MERGERS, AND MORE MERGERS

Arguably, the Merrill purchase could also bolster Lewis' reputation as something of a savior for the financial system -- although in buying Merrill, he spurned the stricken Lehman Brothers Holdings Inc.

Jamie Dimon, who runs JPMorgan Chase & Co won praise earlier this year in agreeing to swallow Bear Stearns Cos rather than let that Wall Street bank collapse.

Born on April 9, 1947, in Meridian, Mississippi, Lewis obtained his finance degree from Georgia State University and joined Bank of America predecessor NCNB Corp in 1969 as a credit analyst.

He became Bank of America's chief executive in April 2001, and two-and-a-half years later announced his first purchase, agreeing to shell out $48 billion for northeast regional bank FleetBoston Financial Corp.

Nearly everyone thought he overpaid. Yet that purchase, which closed in April 2004, is now considered a success.

The next big merger came in June 2005, when Lewis agreed to buy credit card issuer MBNA Corp in a $34.6 billion merger that closed at the start of 2006. The speed of that merger resembled that of Merrill's -- it took less than a week of talks.

The year 2007 brought the $3.3 billion purchase in July of the U.S. Trust Corp private banking unit from Charles Schwab Corp and the $21 billion purchase of LaSalle Bank Corp three months later from Holland's ABN AMRO Holding NV.

Lewis' activities haven't fully translated into rewards for shareholders. While the bank's market value is well above the roughly $88 billion level it had when Lewis took over, it has fallen along with those of other banking companies.

Through Friday, Bank of America shares had fallen 38.7 percent from their November 2006 peak, while the 24-member KBW Bank Index was down 37 percent.

Oppenheimer's Whitney said that while adding Merrill will help Bank of America in the long-term, its stock "will likely not respond accordingly" as investors focus on greater near-term systemic risk and Bank of America's consumer loan exposure.

(Editing by Simon Jessop)