Bank of America Merrill Lynch to trim BlackRock stake

| November 4, 2010 | 0 Comments
Bank of America Merrill Lynch to trim BlackRock stake

Bank of America Merrill Lynch and PNC Financial Services are to reduce their stakes in BlackRock - the world’s largest money manager.

Bank of America will dispose of 42 million shares via a secondary offering worth more than $7 billion (£4.35 billion).

Bank of America has been exploring ways to offload the stake as it tries to sell off non-core assets.

It acquired its BlackRock stake as part of its takeover of Merrill Lynch - which took place shortly after the collapse of Lehman Brothers in autumn 2008.

At the time, the takeover was subject to much criticism and, in particular, Ken Lewis (former chief executive of the bank), was blamed for the poor handling of the acquisition – which was finalised in January 2009.

Meanwhile, under the terms of an agreement with the US Government, Bank of America is required to raise $3 billion in capital through asset sales by the end of this year.

Meanwhile, PNC’s 24% stake will be trimmed to 20.3%.

British banking giant Barclays currently holds a 20% stake in BlackRock, leaving it the second largest investor.

Bank of America’s disposal sent BlackRock’s shares down 4.35% to $165.51 in early trading yesterday.

Bank of America shares rose 1% to $11.52, while PNC gained 2.2% to $54.06.

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