Many feared Merrill would be next to follow Lehman Brothers into bankruptcy
News of the £24.5bn acquisition comes as the fourth-largest bank on Wall Street, Lehman Brothers, headed into bankruptcy, sending alarm bells ringing across the world's stock markets.
It was believed BoA agreed to take over Merrill for just over £16 a share.
The price is a 70% premium on the brokerage's Friday closing price of £9.50, but well below what Merrill was worth at its peak in early 2007.
The move will promote BoA to the position of largest US bank.
Following the acquisition, it will have the largest brokerage in the world with more than 20,000 advisers and £1.4 trillion in client assets.
But it is feared that the takeover may put as much as 40% of Merrill's 60,000 non-broker employees out of work.
This would equate to around 24,000 redundancies.
And the deal does not come without risks to BoA.
Merrill Lynch has been struggling with tight credit markets and billions of dollars in assets tied to mortgages that have plunged in value.
It has suffered about £25bn of writedowns this year, and has managed to raise less than £17bn in capital.
It has also reported four straight quarterly losses, and shares have been sliding.
In a separate move to avert a crisis, ten of the world's biggest banks committed to establish a £40bn borrowing facility to bolster global liquidity.
Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Merrill Lynch, Morgan Stanley, and UBS, said in a joint statement they "initiated a series of actions to help enhance liquidity and mitigate the unprecedented volatility and other challenges affecting global equity and debt markets".
Each bank is contributing £4bn to what they are calling a "collateralised borrowing facility" to help ease access to credit.
The unprecedented corporate activity prompted shares and the dollar to fall sharply as investors jumped into the perceived safe haven of bonds and gold.
News of the £24.5bn acquisition comes as the fourth-largest bank on Wall Street, Lehman Brothers, headed into bankruptcy, sending alarm bells ringing across the world's stock markets.
It was believed BoA agreed to take over Merrill for just over £16 a share.
The price is a 70% premium on the brokerage's Friday closing price of £9.50, but well below what Merrill was worth at its peak in early 2007.
The move will promote BoA to the position of largest US bank.
Following the acquisition, it will have the largest brokerage in the world with more than 20,000 advisers and £1.4 trillion in client assets.
But it is feared that the takeover may put as much as 40% of Merrill's 60,000 non-broker employees out of work.
This would equate to around 24,000 redundancies.
And the deal does not come without risks to BoA.
Merrill Lynch has been struggling with tight credit markets and billions of dollars in assets tied to mortgages that have plunged in value.
It has suffered about £25bn of writedowns this year, and has managed to raise less than £17bn in capital.
It has also reported four straight quarterly losses, and shares have been sliding.
In a separate move to avert a crisis, ten of the world's biggest banks committed to establish a £40bn borrowing facility to bolster global liquidity.
Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Merrill Lynch, Morgan Stanley, and UBS, said in a joint statement they "initiated a series of actions to help enhance liquidity and mitigate the unprecedented volatility and other challenges affecting global equity and debt markets".
Each bank is contributing £4bn to what they are calling a "collateralised borrowing facility" to help ease access to credit.
The unprecedented corporate activity prompted shares and the dollar to fall sharply as investors jumped into the perceived safe haven of bonds and gold.
