Merrill Lynch Company - Finance Essay Example
Merrill Lynch Company
Merrill Lynch is finance giant founded in 1914, ranked 30 in 2008 ranking by Fortune magazine and work force strength of 64000 worldover.
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Strength: Company with turn over of 70 billion US Dollar. Well diversified with presence in segments like capital markets, investment banking, asset management and insurance. 100 years of expertise. Strong brokerage network, capable to underwrite newly placed securities.
Weakness: Sub prime crisis resulting in losses for two consecutive quarters.
Opportunities: Emerging Markets
Threat: Severe competition from Morgan Stanley, J P Morgan, Citigroup, Bank of America etc
Analysis of Company needs:
Stable & Strong leadership: Stanley O’Neal CEO and Chairman since 2003 had to quit in Q3 2007 post sub- prime crisis which resulted in huge losses and write- offs. John Thain has taken over from Stanley, however he was also in contention for top post at Citigroup.
Reducing exposure in collateralized debt
Clear business strategy with long term focus. For market share Merrill Lynch has jumped from one segment to another. During technology boom, ML put too much focus on IT, then inclined for fixed income and commodities and later to derivatives and lastly to sub- prime mortgages.
Unlocking value from BlackRock and Bloomberg
Panacea for problems of Merrill Lynch is in its acquisition by other company. But because of shear market capitalization of more than 50 billion USD, it is not easy for acquirer to swallow Merrill Lynch. Potential players like RBS (recently acquired ABN Amro), Citigroup and Bank Of America (reeling from sub prime impact) are not active as of now. Merger possibilities are tried with Wachovia Corporation, which has strong presence in Latin countries.
1. Fortune magazine (2007- 08 issues)
2. Merrill Lynch Annual report 2007