Friday, January 26, 2007

Super size me

Another one?

Pretty soon we'll have to start using the Empire's theme music. Even if we're not allied with the Dark Side.

NEW YORK (Reuters) -- Bank of America, the No. 2 U.S. bank, and Countrywide Financial, the largest U.S. mortgage lender, are in talks that could lead to a merger, the Financial Times said on its Web site Friday.
In afternoon trading,
Countrywide (Charts) shares rose 4.2 percent, while Bank of America (Charts) shares were down 0.3 percent.

The companies have held talks about an alliance to create the biggest U.S. mortgage lending group, the newspaper said, citing people close to the matter.

Those talks might lead to Bank of America's purchase of Countrywide, or a joint venture under which Bank of America would use its branch network to help sell home mortgages originated by Countrywide, the newspaper said. Talks are at an early stage and could fall apart, it said.

Calls to both companies were not immediately returned.

Before Friday, Countrywide's market capitalization was about $25 billion. Analysts estimated that it might fetch $30 billion in a takeover, the Financial Times said.

A combination might help Bank of America, which has more deposits than any other U.S. bank and is the No. 1 U.S. credit card issuer, achieve dominance in mortgage lending.

It would come on the heels of Chief Executive Kenneth Lewis's decision to pay $48 billion in 2004 for FleetBoston and $34.2 billion last year for card issuer MBNA Corp.

A combination might also be a crowning achievement for Countrywide Chief Executive Angelo Mozilo, who founded his company in 1969 and recently signed a contract extension to keep him at Countrywide's helm through 2009, when he will be 71.

Bank of America has 5,747 U.S. branches, roughly two-thirds more than any other company. Countrywide last year originated $462.5 billion of mortgage loans.

So this would make us #1 in deposits, #1 in market cap, #1 in branches, #1 in credit cards, and probably #1 in mortgages.

We could always get a mascot of an 800-pound gorilla. That's the problem with winning - someone has to lose. Not us, though.

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