Bank of America Corporation / FleetBoston Financial Corporation

OFT closed case: Proposed merger between Bank of America Corporation and FleetBoston Financial Corporation.

Affected market: Financial Services

No. ME/1589/04

The OFT's decision on reference under section 33 given on 27 February 2004.


Bank of America Corporation (BoA) is incorporated in Delaware. Through its subsidiaries it provides a diversified range of banking and non-banking financial services and products throughout the US and in selected international markets. BoA's principal activity in Europe is global corporate and investment banking. FleetBoston Financial Corporation (Fleet) is a diversified financial services company incorporated in Rhode Island. Its principal European activities are in the UK where it provides a range of corporate and investment banking services including provision of credit to corporate clients, foreign exchange and derivatives trading, cash management and business trading services. Fleet's UK turnover in the 2002 calendar year was (see [note 1]).


The parties notified the transaction to the OFT on 30 January 2004. The statutory deadline, which has not been extended, expires on 27 February 2004.


As a result of this transaction BoA and Fleet will cease to be distinct.  The UK turnover of Fleet exceeds £70 million, so the turnover test in section 23(1)(b) of the Enterprise Act 2002 (the Act) is satisfied.  A relevant merger situation is likely to be created.


Product market

The parties propose that there are three distinct sectors in banking: a) retail banking, b) corporate banking and c) financial and investment services.  There is no overlap between the parties in retail banking in the UK. There are overlaps between the parties in both corporate banking (the provision of banking services such as deposits, international payments, letters of credit and advice to corporate clients), and financial and investment services (both foreign exchange services or trading in foreign exchange, and derivatives trading).

Geographic market

In this case a cautious approach will be taken with regard to corporate banking services, and the impact of this transaction at the national level will be considered.  With regard to financial services, shares of supply on an international basis would perhaps be more representative of the parties' competitive position. However, share of supply information has only been provided on a UK basis. If concerns do not arise on this narrower basis they are unlikely to exist on a wider frame of reference.


Market shares

The parties submit that the merger will result in the following shares of supply and increment on a UK basis:

Corporate Banking – [0-10 per cent (increment 0-5 per cent)] (see [note 2]) Foreign Exchange Services – [0-10 per cent (increment 0-5 per cent)] (see [note 2])
Derivatives Trading – [0-10 per cent (increment 0-5 per cent)] (see [note 2])

There are a broad range of competing banks, such as JP Morgan, Citigroup, Deutsche Bank, and the provision of corporate banking services appears to be becoming increasingly globalised.


This case does not raise vertical issues.


Third parties did not raise any concerns about the merger.


The parties overlap in the provision of corporate banking, foreign exchange services and derivatives trading services in the UK. However, the combined share of supply of the parties in each of these product areas is low, the increment is small, and there is a broad range of competitors active in each of these sectors in the UK. In addition, the banking industry is becoming increasingly globalised, widening possibilities for established firms abroad to begin offering products in the UK.

The OFT does not believe that it is or may be the case that the merger may be expected to result in a substantial lessening of competition within a market or markets in the UK.


This merger will therefore not be referred to the Competition Commission under section 33(1) of the Act.


  1. Figure excised at the request of the parties.
  2. Figures replaced by range at the request of the parties.
Published 27 February 2004