Bank of America Corp. has agreed to buy MBNA Corp., one of the largest stand-alone credit card issuers, for $35 billion in cash and stock, according to Bloomberg. Bank of America plans to cut 6,000 jobs after the purchase is finalized.
Bloomberg cites this as a strategic move, considering the fact that Citigroup is currently barred by regulators from making big acquisitions and JPMorgan is busy with Bank One.
The deal is expected to close in the fourth quarter of this year and will see MBNA shareholders get half a share of Bank of America plus $4.125 in cash for each of their shares. While the boards of directors of both companies have approved the takeover, it remains subject to the approval of regulators and MBNA shareholders. The takeover values MBNA at $27.50 per share.
MBNA shares rose by as much as 27% after the announcement, according to the news agency, and Bank of America said it expects $1.25 billion in restructuring costs from the MBNA acquisition.