The Charlotte-based financial company will buy MBNA for $35 billion, and will cut 6,000 jobs as it reorganizes.
A cash and stock deal valued at $35 billion USD was approved by the boards of both Bank of America and MBNA. And while 6,000 jobs will be cut as part of an $850 million cost-cutting strategy, MBNA CEO Bruce Hammonds will land lightly on his feet.
Mr. Hammonds will be the new president of Bank of America Card Services. At a New York press conference today, he claimed that without the deal, there “would have been significant job losses.” And there would have been about $1 billion in cuts.
The percentage of job cuts for each company has not yet been disclosed. MBNA took the step of instructing employees not to speak with the media about the acquisition.
Delaware Senator Tom Carper (D-Del.) spoke favorably of the deal today, according to the News Journal Online. “It’s about as good a fit as we could have hoped for,” said Mr. Carper, who also discussed the situation with MBNA officials by phone. “They could have merged with an institution that would have moved its headquarters somewhere else.”
And that move would have been bad for Mr. Carper. MBNA was his biggest campaign contributor from 1999 through 2004, giving $132,447 to his coffers according to OpenSecrets.org. Mr. Carper also sits on the Senate Banking, Housing, and Urban Affairs Committee.
David Utter is a staff writer for murdok covering technology and business. Email him here.
