Brexit prompts Bank of America Merrill Lynch to seek merger approval in Ireland

US investment banking giant Bank of America Merrill Lynch has applied for Commercial Court approval for the merger of a UK-based subsidiary with a related Irish firm due to the "fallout from Brexit".

The group wants to merge Bank of America Merrill Lynch International DAC, with a registered office at Leopardstown, Dublin, with Bank of America Merrill Lynch International Ltd, with a registered office at King Edward Street, London. Both are wholly-owned subsidiaries of the US-based investment banking group.

Paul Sreenan SC, for the Irish entity, told Mr Justice Robert Haughton on Monday the application was being made as a result of the “fallout from Brexit”.

The BAC group said the merger is among the steps it intends to take to ensure it is able to continue to operate its business and service its clients on an uninterrupted basis following the UK’s intended withdrawal from the EU.

It says BAMLI is the primary lending banking entity for Bank of America in Europe, the Middle East and Africa and carries out its regulated European Economic Area (EEA) banking business in reliance on the freedom of establishment and freedom of services passports as an EEA regulated firm.

Feasibility

It says the feasibility of this model is likely to be affected by Brexit and the merger is intended to ensure the Irish-based BAMLI DAC will be able to carry out BAMLI’s existing EEA banking business.

The full consequences of Brexit and how it will impact on its business and on the legal and regulatory regimes in both the EEA and the UK are not yet known, it says.

The UK firm has total assets of $43.3 billion and liabilities of $34.8 billion. The Irish firm has assets of $5 billion and liabilities of $2.8 billion.

Commercial importance

The court was told the merger is of great commercial importance to the group, is in the best interests of the companies and it is hoped it will be completed by December 1st next.

The application was admitted on Monday to the fast track commercial court list by Mr Justice Haughton, who made directions to progress the matter and adjourned it to November.