Bank of America takeover to end independent Merrill

* All-stock merger initially values Merrill at $29/shr

* Merrill is third Wall Street firm to disappear in year

* Bank of America shares tumble

(Adds details on shareholder vote, stocks in paragraphs 2-4)

By Jonathan Stempel and Elinor Comlay

NEW YORK (Reuters) - Bank of America Corp's (BAC.N) $50 billion acquisition of Merrill Lynch & Co Inc MER.N would mark the end of a storied name in American finance, but create the nation's biggest bank by far.

Investors soured on the all-stock merger, worried it magnified Bank on America's exposure to risky debt in a fragile economy -- less than three months after it bought mortgage giant Countrywide Financial Corp.

Bank of America shares closed down 21.3 percent on Monday, wiping out about $33 billion of market value, while Merrill ended barely changed at $17.06, despite being valued in the merger at $29 each, a 70 percent premium to Friday's close.

Merrill's stock price might indicate skepticism that the merger will go through. The deal requires approval by both banks' shareholders because of the large amount of stock involved.