FleetBoston Merger
Pursuant to the Agreement and Plan of Merger, dated October 27, 2003,
between the Corporation and FleetBoston (the Merger Agreement), we acquired 100
percent of the outstanding stock of FleetBoston on April 1, 2004. The Merger
created a banking institution with leading market shares throughout the
Northeast, Southeast, Southwest and West regions of the United States.
FleetBoston’s results of operations were included in the Corporation’s results
beginning April 1, 2004.
As provided by the Merger Agreement, approximately 1.069 billion shares
of FleetBoston common stock were exchanged for approximately 1.187 billion
shares of the Corporation’s common stock, as adjusted for the stock split. At
the date of the Merger, this represented approximately 29 percent of the
Corporation’s outstanding common stock. FleetBoston shareholders also received
cash of $4 million in lieu of any fractional shares of the Corporation’s common
stock that would have otherwise been issued on April 1, 2004. Holders of FleetBoston preferred stock
received 1.1 million shares of the Corporation’s preferred stock. The purchase price was adjusted to reflect the effect of the 15.7
million shares of FleetBoston common stock that we already owned.
In connection with the Merger, we implemented a plan to
integrate our operations with FleetBoston’s. During 2004, including an
infrastructure initiative, $618 million was recorded as Merger and
Restructuring Charges and $658 million was recorded as an adjustment to
Goodwill related to these activities. During 2004, our integration activities
progressed according to schedule. We rebranded all banking centers in the
former FleetBoston franchise, as well as a majority of outstanding credit
cards. In addition, we began to rollout customer service platforms, including Premier
Banking, to the Northeast. We also completed several key systems
conversions necessary for full integration. For more information on the Merger,
see Note 2 of the Consolidated Financial Statements.
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