A pair of acquisitions announced today have two mortgage giants heading in different directions.
Bank of America Corp. announced it will acquire MBNA Corp. in a stock transaction valued at $35 billion. The deal, which is expected to close during the fourth quarter, will reportedly bring the Charlotte, N.C.-based behemoth's credit card portfolio to $143 billion and 40 million active accounts.
BoA Chairman and CEO Kenneth D. Lewis said in the announcement that the merged entity will have "the size and scale to drive distribution and marketing efficiencies." Helping the efficiency factor is the expected layoff of 6,000 employees.
While BoA, which reported 2004 mortgage production of $87.6 billion, says it will become one of the largest credit card issuers as a result of the transaction, Countrywide Financial Corp., which last year said it originated $363.0 billion -- the highest reported by any primary mortgage lender in the country -- announced it will acquire the mortgage unit of KB Home.
Terms of the deal to acquire KB Home Mortgage Co., which includes the formation of a 50/50 joint venture managed by Countrywide for lending to KB's home customers, were not disclosed.
Both KB and Calabasas, Calif.-based Countrywide were recently honored by The American Business Awards for respectively having the Best Chairman and Best Investor Relations Program.
"Countrywide is uniquely capable of serving KB Home's large and growing customer base in current and future markets," KB Chairman and CEO Bruce Karatz said in the statement. "We believe the transition to working directly with an established lending leader makes sense for the benefit of customers and business."
"Our breadth of products, state of the art technology and outstanding staff across the country offer KB Home and its customers a new level of efficiency and home loan offerings," Countrywide Chairman and CEO Angelo Mozilo touted in the announcement.