Bank of America’s hasty decision to buy troubled Merrill Lynch for roughly $40 billion gives us pause because it seems to rhyme with Conseco’s disastrous purchase of Green Tree Financial in the late 1990s. The Green Tree acquisition proved to be so toxic that Conseco soon took billions of dollars in writeoffs, then filed for bankruptcy protection.  It was the third largest bankruptcy in US history up to that time.

While it’s obviously too early to know just how the Merrill purchase will play out, Bank of America may be making one of the classic mistakes that can occur in a consolidating industry. B of A may be focusing so much on the positive attributes of Merrill, which B of A has long coveted, that it may be glossing over the problems. B of A loves the idea of increasing its size and adding Merrill’s huge retail brokerage operation and investment banking unit. Meanwhile, Merrill’s investment portfolio, which includes heavy doses of mortgage-related securities whose value has declined by $45 billion, may well continue to spiral downward.

B of A may also be overpaying. There’s little doubt that Merrill would have cost B of A far less a week from now than it did when the deal was negotiated over the weekend.

In addition, B of A may be making a common mistake associated with synergy strategies. The company seems to assume that there will be benefits from combining different types of financial services—that B of A’s banking operations will somehow benefit from, and benefit, Merrill’s brokerage and investment banking units. But that financial supermarket strategy has been widely discredited. Citigroup, the biggest proponent of supermarket-like synergies, is now under pressure to spin off some operations to streamline its structure.

There likely also will be a hangover from the mistakes Merrill made when it embarked on an adjacency strategy. Merrill seems to have had a bad case of Goldman Sachs envy or hedge-fund envy, watching how Goldman and the funds earned billions of dollars by investing in high-risk securities. Merrill looked at its thousands of brokers and its huge investment-banking operations and decided it had the expertise to move into the market for managing risk. But Merrill overestimated its strengths and underestimated the complexities of the new market. It turns out that managing risk is a highly specialized endeavor, requiring a certain type of person, a particular structure and seasoning that comes only after years of institutional experience with the market. Merrill was totally unprepared—and B of A has no more experience with managing risk than Merrill did.

Now, the tone in the market may turn to the positive, if regulators manage to bolster AIG and Washington Mutual. B of A may turn out to have engineered a bargain by acting decisively in the middle of a crisis. In addition, B of A has extensive experience with acquiring other businesses and integrating them into B of A’s core business, experience that mitigates some of the risk that normally comes with a big purchase.

But B of A has already tried once to call the bottom in the subprime mess, when it bought Countrywide Financial two months ago for $4 billion. As of the moment, that purchase looks rash—and it had a better strategic rationale than the Merrill takeover, given that Countrywide fit nicely with B of A’s existing mortgage operations. We’re afraid that the Merrill purchase may turn out worse.