It only takes a look at a map to see why Bank of America (Bof A) made an agreed offer for FleetBoston Financial on October 27th. Bof A already had a franchise stretching down from the north-west corner of the United States to California, across the south and up the east coast from Florida to Maryland. Adding FleetBoston, the largest bank in New England, will create a Bank of America worthy of its name. The purchase, for $47 billion-worth of Bof A shares (at pre-deal prices), will create the biggest bank in America, by assets, after Citigroup. It is the most valuable merger in American banking bar that of Bof A and NationsBank in 1998. The new Bof A's vast franchise has advantages: a diverse deposit and lending base, efficiency in marketing and technology, and perhaps a network of corporate contacts that may be useful in strengthening investment-banking operations. In all these areas Bof A has done well in the past two years. Its chief executive, Kenneth Lewis, has found the value buried under the chaotic, costly expansion strategy of his predecessor, Hugh McColl.
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