Bank of America and Countrywide Merger?

January 27, 2007 No Comments »


***See today’s news regarding the proposed Bank of America buyout.***

The Financial Times reported that Bank of America and Countrywide could be in merger talks as the two companies met recently.

The second largest U.S. Bank and the largest U.S. mortgage lender met to discuss a possible alliance, although it was noted that talks were very preliminary, and nothing is guaranteed to materialize.

The news sent shares of mortgage lender Countrywide up $1.71 to $42 in trading Friday, and a further .73 cents higher after-hours. Bank of America shares dropped slightly less than one-percent, and saw little change after-hours.

If the two companies merge, Countrywide could reap the benefits of a buyout valued at $30 billion, $5 billion above their current market capitalization.

While this is still speculative, such a move could plant Bank of America at the top of the mortgage lending market in the U.S., alongside their top spot as a credit card issuer after last year’s purchase of MBNA.

It is assumed that Bank of America would service loans originated by Countrywide through their 5,747 branches nationwide.

A merger of this nature would be timely as many regional lenders are facing layoffs and closures as mortgage business slows and housing prices continue to fall nationwide.

Here is a list of closed lenders updated daily.

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