Bank of America Corp. has received the approval of the Federal Reserve Board to proceed with its $35 billion bid to acquire credit card issuer MBNA Corp., the Charlotte bank said Thursday.
CHARLOTTE, N.C. — Bank of America Corp. has received the approval of the Federal Reserve Board to proceed with its $35 billion bid to acquire credit card issuer MBNA Corp., the Charlotte bank said Thursday.
Bank of America expects to close the deal on Jan. 1, creating the nation’s largest credit card issuer. It also is expected to cost 6,000 jobs.
One of the main issues before the Fed was whether Bank of America would exceed the 10 percent federal cap on deposits following the merger.
On Thursday, Bank of America spokesman Terry Francisco said the bank would control approximately 9.7 percent of the total amount of U.S. deposits after the merger, according to the Fed’s analysis.
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With the Fed’s action, Bank of America has now received all necessary regulatory approvals, the bank said. Last month, the merger received the overwhelming approval of MBNA shareholders in Wilmington, Del.
“MBNA’s marketing and product development capabilities are significant,” Ken Lewis, chairman and chief executive of Bank of America, said in a statement. “They deliver innovative products to market faster than anyone in the industry.”
MBNA is the leader in so-called affinity marketing with its relationships with organizations ranging from the National Football League to L.L. Bean and hundreds of medical organizations.
Bank of America Card Services will be led by Bruce Hammonds, who is currently the chairman and CEO of MBNA.
Share of Bank of America fell 10 cents to close at $46.68 in trading Thursday at the New York Stock Exchange.