Merrill CEO to stay with Bank of America

Bank of America Corp. said Thursday that Merrill Lynch & Co.'s Chief Executive John Thain will take a new position at Bank of America once the bank completes its acquisition of Merrill.

The new division Thain will oversee includes many of the operations that will be merged from Merrill, including the brokerage and mutual fund operations as well as Bank of America's investment banking and management operations already in place.

Thain will serve as president of global banking, securities and wealth management for Bank of America (BAC, Fortune 500). Thain will oversee global corporate and investment banking and most of Bank of America's global wealth and investment management operations. Those operations will be merged with similar functions at Merrill Lynch (MER, Fortune 500).

Thain, 53, became CEO of Merrill Lynch last November, replacing Stan O'Neal. Thain previously served as head of the New York Stock Exchange and as president and chief operating officer at Goldman Sachs Group Inc (GS, Fortune 500).

Bank of America's current president of global corporate and investment banking Brian Moynihan will remain in the position until the acquisition is completed. Once Thain enters his new role, Moynihan will become president of private equity and global operations.

Bank of America agreed last month to buy the investment bank in an all-stock deal originally valued at about $50 billion.

The acquisition came just hours after Merrill competitor Lehman Brothers Holdings Inc. (LEHMQ) filed for bankruptcy protection and as investors were concerned the stand-alone investment banking model would no longer be viable amid continued weakness in the credit markets.

Merrill and Bank of America worked quickly to strike a deal, with talks beginning on the morning of Sept. 13 and wrapping up the following day.

The deal kept Merrill from a Bear Stearns-style fire sale or a complete meltdown like Lehman Brothers. At the same time, it will enable Bank of America to expand the financial services it offers to its already huge customer base.

The combined entity will create one of the nation's largest financial services firms.

Under terms of the transaction, Bank of America will exchange 0.8595 shares of Bank of America common stock for each Merrill Lynch common share. Based on Bank of America's closing price of $38.13 Wednesday, Merrill shareholders will receive about $32.77 per share.

Shares of Bank of America fell 64 cents to $37.49 in morning trading. Merrill shares rose 75 cents, or 2.8%, to $27.45.