Merrill Lynch & Co. to acquire First Republic Bank for $1.8 billion

Merrill Lynch & Co. has said that they are acquiring First Republic Bank for $1.8 billion. Through this deal they would get access to clients with an average net worth of $20 million.

The price of deal values San Francisco-based First Republic at $55 per share. This is a 44 percent premium over the company’s stock price in the market.

This deal shows that Merrill Chief Executive Officer Stanley O’Neal is trying to rely on acquisitions to fuel profit growth at the world’s third-largest securities firm.

Steve Roukis, managing director at New York-based Matrix Asset Advisors spoke on this new development: “Luxury lending and wealth management — those are higher- end customers. It’s a continuation of their strategy to focus on their core business and either build or acquire whatever gives them a better return on their cost of capital.”

First Republic Bank has around 1,100 employees and operates bank branches in several US cities including San Francisco, Los Angeles, Las Vegas, Boston and New York.

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