|
BofA Faces Monumental Integration Task
|
| Written by Mel Duvall |
It may take months for the dust to settle from this week’s financial meltdown, but when the clouds do disperse Bank of America will clearly emerge as a major victor.
The bank capitalized on the credit crisis facing Wall Street institution Merrill Lynch & Co. by striking a deal to purchase the brokerage for about $50 billion.
BofA chief executive Ken Lewis called the blockbuster acquisition “the strategic deal of a lifetime” and speculated that it may be the last mega-purchase of his career. This could, in fact, be the deal that Lewis will be remembered for, but his career – and Bank of America itself – has been built on a series of “once in a lifetime opportunities.”
Consider some of the more recent deals Lewis has architected. In October of 2003, BofA agreed to purchase FleetBoston Financial for $48 billion. Two years later, in June of 2005, he struck a deal to purchase credit card giant MBNA for $35 billion in cash and stock. Then in January of this year, BofA stepped in to acquire troubled mortgage issuer Countrywide Financial for about $4 billion in stock.
The Merrill acquisition will result in a systems integration effort that is massive by any comparison. In the past this has not been BofA’s strongest suit. After purchasing Florida’s Barnett Banks in 1997, it so badly bungled the conversion of Barnett’s systems over to its own core banking platform that customers fled to competitors in frustration. It similarly took much longer than expected to integrate banking systems in California with the rest of the country following the 1998 merger between NationsBank and BankAmerica, which created today’s Bank of America.
To be certain, BofA has gained considerable experience in systems integration since that time. The FleetBoston and MBNA integrations were relatively smooth in comparison to earlier efforts. But with two massive integration projects now required – Countrywide and Merrill – Lewis has given his technology staff a challenge equal to his own monumental ambitions.
Only registered users can write comments.
Please login or register. |
| [ Back ] |
