Bank of America's Ken Lewis: New King of M&A

This morning Bank of America announced that it is acquiring MBNA for $35 billion in a cash and stock deal. I have been a Bank of America shareholder for a couple of years now and I continue to marvel at the ability of Ken Lewis, Bank of America CEO, to make tough deals turn out well.

The MBNA deal seems to be a good strategic fit. Bank of America has a big, if unspectacular, credit card operation, MBNA has a big, well run credit card operation. Bank of America has access to really cheap funding, MBNA needs cheap funding. The addition of MBNA should give Bank of America the largest credit card portfolio in the US, surpassing JP Morgan and Citi.

The $35 billion price for the deal is a 31% premium for MBNA, which may make it difficult for Bank of America shareholders to realize value from the deal, but Lewis has a great track record. While I haven't really broken down the deal, so far the market seems to approve of the deal with Bank of America stock down only $1 this morning.

The deal comes relatively soon after the merger with Fleet, a huge deal that some thought would keep B of A away from big acquisitions for a while. However, earlier this month B of A took a 9% share in China Construction Bank, giving the Bank access to the fast growing (and maturing) Chinese market.

I am still a Bank of America fan, and I think this will turn out to be a good deal. Bank of America scheduled to present financial results for the second quarter of 2005 on Monday, July 18, 2005 at 9:30 a.m, it should be an interesting call

Timothy Burger

So Long, GJoe

One of my favorite writers, and good friend, Joe Walberg, is hanging it up. Joe has run his website, www.GJWAlberg.com since 2001. GJoe has created some of the most original, interesting, and entertaining writing that could fall into the "blog" category. Joe has been the source of a lot of good laughs, some deep thoughts, and ultimately, responsible for me starting this site.

Joe is a good friend and I look forward to his next venture, until then, you can read his writing at www.gjwalberg.com, make sure you check out his post about his first day at a real job, absolutely hilarious.

Timothy Burger