Bank of America to buy Merrill Lynch for $44B, report says

NEW YORK -- Bank of America has agreed to buy Merrill Lynch for about $44 billion, or around $29 a share, according to The Wall Street Journal. A deal between the two big financial companies would lift the uncertainty that has shrouded Merrill Lynch since the start of the credit crisis a year ago.

A spokeswoman for Merrill Lynch declined to comment on the report. A spokesman for Bank of America also declined comment.

However, the deal does not come without risks. Merrill Lynch, like many of its Wall Street peers, has been struggling with tight credit markets and billions of dollars in assets tied to mortgages that have plunged in value. Merrill has reported four straight quarterly losses, and its stock has been sliding.

At $29 a share, Merrill shareholders would get a 70% premium over the company's Friday closing stock price of $17.05. The stock has traded between $16.60 and $78.66 a share over the past 52 weeks.

"For BofA to step in and offer a premium strikes me as being imprudent. BofA could get a much better deal if they just sat and waited," said Ladenburg Thalmann analyst Richard Bove.

And Bank of America's own finances are far from robust. As consumer credit deteriorates, the bank has seen its profits decline, and the company is still in the midst of absorbing the embattled mortgage lender Countrywide Financial, which it acquired in January.

Major banks and brokerages met this weekend with government officials to try to formulate a rescue of Lehman Brothers. The withdrawal of Bank of America, along with the pullout of Barclays from the talks, raised the worry that Lehman might be forced to file for bankruptcy protection.