Rebirth of England.

Chapter 603 Standard Chartered-Merrill Lynch
According to the merger agreement urgently signed by Merrill Lynch and Standard Chartered Bank, Standard Chartered Bank will acquire Merrill Lynch for a total price of US$400 billion, including US$250 billion in cash and issuing new shares worth US$150 billion to Merrill Lynch shareholders to complete this acquisition.

This acquisition price represents a premium of more than 50% compared to the market value corresponding to Merrill Lynch's closing price on the previous trading day.

The offer is clearly beneficial to Merrill Lynch.

This is one reason why Merrill Lynch quickly finalized the deal with Standard Chartered Bank after contacting several potential buyers.

Previously, Bear Stearns and Lehman Brothers missed the best time for transactions, and their shareholders were unable to sell their shares normally, resulting in heavy losses. This undoubtedly increased the sense of urgency among Merrill Lynch shareholders and prompted them to quickly reach a deal.

After the acquisition is completed, all of Merrill Lynch's shares will be exchanged for cash and Standard Chartered Bank shares, and Merrill Lynch will complete its delisting from the stock market.

According to Barron's plan, after the completion of this merger, Standard Chartered Bank will be renamed Standard Chartered Merrill Lynch, and some of Merrill Lynch's overseas businesses will be incorporated into Standard Chartered Bank, while in the United States, investment banking business will still be conducted under the name of "Merrill Lynch".

Prior to this, Standard Chartered Bank also had both commercial banking and investment banking businesses, but its business was mainly concentrated in emerging markets such as Asia, Africa and Latin America. After the acquisition of Northern Rock Bank, Standard Chartered Bank expanded its commercial banking and investment banking business in the UK. Now, through the acquisition of Merrill Lynch, they will also bring these main businesses into the North American market.

It should be noted that Merrill Lynch is a bank with relatively prominent brokerage business and has 1.6 financial advisors. By acquiring Merrill Lynch, Standard Chartered Merrill Lynch will not only enter into the commercial banking and securities business in the United States, but its own brokerage business income will also increase significantly, and the proportion of non-interest income will further increase.

Merrill Lynch's commercial bank, Merrill Lynch Industrial Bank, will also be integrated into Standard Chartered Bank's system, giving it a large number of business outlets and depositors in North America.

It is worth mentioning that before this acquisition, Standard Chartered Bank's market value has reached 600 billion US dollars, and its stock price has increased by more than 30% compared with last year! Its size has increased by 1.5 times in the past four years, and the assets controlled by Standard Chartered Bank are currently close to 6000 billion US dollars.

This also makes Standard Chartered the fourth largest listed bank in the UK, ahead of HSBC Holdings, Royal Bank of Scotland and Barclays.

Standard Chartered Bank's acquisition of Merrill Lynch will be financed by British Fortune (BFT) Fund, which will provide it with US$250 billion in financing (BFT Fund will purchase Standard Chartered Bank's US$250 billion convertible bonds) and issue new shares worth US$150 billion to Merrill Lynch.

After the acquisition, the original shareholders of Merrill Lynch will hold approximately 20% of the shares of Standard Chartered Merrill Lynch (of which Caesars Fund's shares in Merrill Lynch will be exchanged for approximately 1.7% of Standard Chartered Merrill Lynch shares and some cash).

After the acquisition, DS Holdings will hold 52% of Standard Chartered Merrill Lynch's shares; Rich23 Capital will hold 12% of its shares; and Caesar Funds will hold 1.7% of its shares.

Barron still controls 65.7% of Standard Chartered Merrill Lynch's shares.

In addition, the Cavendish Trust owns £250 billion of convertible bonds from Standard Chartered Merrill Lynch; the BFT Fund also holds $250 billion of convertible bonds from Standard Chartered Merrill Lynch.

After these bonds are converted into Standard Chartered Merrill Lynch shares in due course, Baron's holdings in Standard Chartered Merrill Lynch will also increase significantly.

In fact, for the listed companies he previously controlled, a major way of capital operation during this subprime mortgage crisis was to start reducing holdings when the stock prices were high, and then after the subprime mortgage crisis gradually broke out, he provided funds to these companies in the form of convertible bonds for acquisitions and expansions.

Then, when the stock price is low, the convertible bonds are converted into the company's common stock to significantly increase the proportion of shares he holds in these listed companies. After this process, a cycle of "selling high and buying low" is completed.

Currently, Standard Chartered Bank has signed an acquisition agreement with Merrill Lynch and has obtained the approval of the boards of directors of both parties.

Of course, this agreement still needs to be finally approved by the European Union and the US government, and then this huge merger and acquisition plan will begin.

……

At the same time that Standard Chartered Group and Merrill Lynch reached an agreement, it meant that Lehman Brothers' only lifeline was Barclays Bank.

At this time, Barclays Bank had no investment banking business. In order to enter the American market, they had previously stated that they were willing to acquire Lehman Brothers after stripping away its toxic assets for US$100 billion.

As mentioned before, in order to survive this bankruptcy crisis, Lehman Brothers' CEO Fuld proposed a split plan - he planned to divest Lehman Brothers' problematic assets and other assets related to mortgages to form a "bad bank"; and merge the best assets and high-quality businesses into a "good bank."

Financing is obtained by selling “good banks” to inject capital into “bad banks”.

At that time, the Development Bank of Korea was interested in Fuld's plan and made an acquisition offer to Lehman Brothers.

They had the opportunity to reach a cooperation, but Fuld thought the other party's offer was too low, and the negotiations between the two sides remained at a stalemate.

A few days later, South Korea's financial regulator criticized the deal, which directly led to the Development Bank of Korea abandoning the acquisition.

But now that their hopes of selling Lehman Brothers as a whole to Standard Chartered Bank have failed, they can only revive this plan and use it to negotiate with Barclays Bank...

On July 7, the day after Standard Chartered Bank terminated its acquisition of Lehman Brothers, U.S. Treasury Secretary Paulson and Geithner came to the conference hall and announced a piece of good news that all participants knew: last night, the British Barclays Bank had drawn up a complete plan to acquire Lehman and was ready to implement it.

The only obstacle now is that the plan requires other banks to provide enough funds to finance Lehman Brothers' bad assets, a total of about $330 billion.

Geithner asked the bigwigs present to give a number and develop a detailed investment plan.

Barclays' enthusiasm for acquisition gave the bigwigs full confidence. Except for Merrill Lynch (which has been confirmed to be acquired by Standard Chartered Bank) and Bear Stearns (which has been acquired by JPMorgan Chase), which clearly expressed their unwillingness to invest, other bankers gathered in a circle and began to subscribe for capital shares. Among them, JPMorgan Chase's CEO Jamie Dimon was the most active.

JPMorgan Chase said it was willing to finance Lehman Brothers' bad assets with $10 billion...

(End of this chapter)