Thain saved Merrill, but it was Bank of America's Ken Lewis who emerged with the prize. By adding the most recognized name on Wall Street to his burgeoning banking empire — for 66% of Merrill's value a year ago — Lewis has effectively turned Bank of America into one of the biggest banks in the world and the largest player in wealth management. Its reach will touch almost every aspect of finance, from credit cards to merger advice to car loans. And the timing was right: the buyout values Merrill stock at $29 a share, a lot less than its early 2007 high of $98 a share.
Merrill might seem just the latest acquisition in a long line of buyouts Lewis orchestrated in the last four years, including a recent and controversial bailout of the troubled mortgage house Countrywide. But rescuing Merrill is a dream come true for the Meridian, Mississippi native, who had yearned for the respect of the more established banking elites. Now he owns the Thundering Herd, Merrill's 17,000 sales brokers who will join Bank of America's smaller shop to form Merrill Lynch Wealth Management. A year ago, Lewis announced he was done with investment banking, having poured $625 million into expanding that operation, only to suffer loss after loss. Merrill effectively gives Bank of America a preeminent, global investment-banking business overnight, something Lewis could have spent a decade creating. Sure, Merrill is short on cash and comes with a huge amount of debt. But most analysts predict the two firms will make a good fit.
—By Kristina Dell