Bank of America continued to streamline its operations and raise needed capital by selling off its rich stake in the world’s largest asset manager - BlackRock.  The sale of its remaining 7% stake in BlackRock brought the bank $2.55 billion, or $187.65 a share - representing a 3.6% discount to the average closing price over the last 15 days.  Thomas Montag, president of Bank of America’s global banking and markets group, will continue to serve on BlackRock’s board.

“There is a long history of collaboration between Bank of America, Merrill Lynch and BlackRock that focuses on providing exceptional investment solutions for our respective clients.  Our decision to monetize our stake in BlackRock will have no effect on our commitment to continuing this very successful partnership."  -- Brian Moynihan, President, CEO of Bank of America.

BofA had previously concluded that BlackRock was not a core asset, and investors had long felt that the bank didn't have the scale to be a force in the asset management business and could put its cash to better use elsewhere. 

The alliance was formed in 2006, when Merrill Lynch agreed to sell its asset management division to BlackRock in exchange for a 49.8% interest in the company.  BlackRock intends to finance the deal using available cash and a total of $2 billion of commercial paper, medium-term and long-term debt.  [NYT Dealbook, 5/19/11]