A deal would be all the more dramatic because Merrill, upon the arrival of Chief Executive John Thain, did more than many U.S. financial giants to insulate itself from the financial crisis that began last year. It raised large amounts of capital, purged itself of toxic assets and sold big equity stakes, such as its holding in financial-information giant Bloomberg. That Merrill has opted to sell itself thus underscores the severity of crisis.

Then why would Merrill cut and run (apart from making a 10+% profit with the reported $29 per share offering)? This seems like awfully short term thinking.

For BoA, it seems CEO Kenneth Lewis just plain likes to acquire:

"Why would Bank of America do this?" said analyst Nancy Bush at NAB Research LLC in Annandale, N.J. "Ken Lewis always likes to buy the biggest thing he can. So why not this? You are master of the universe, basically."

Both quotes taken from WSJ - "Bank of America Reaches Deal for Merrill"

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