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Filed pursuant to Rule 424(b)(3)
Registration No. 333-134916

BlackRock, Inc.

40 East 52nd Street

New York, NY 10022

August 23, 2006

To Our Stockholders:

You are cordially invited to attend a special meeting of the stockholders of BlackRock, Inc., which will be held at The New York Palace Hotel, located at 455 Madison Avenue, New York, New York, at 3 p.m., local time, on Monday, September 25, 2006. Only stockholders who hold shares of BlackRock’s class A common stock or class B common stock at the close of business on August 3, 2006 will be entitled to vote at the special meeting. All of our stockholders are encouraged to attend the meeting and read this proxy statement/prospectus carefully.

At the special meeting, holders of our class A common stock and class B common stock who are entitled to vote will be asked to adopt a transaction agreement and plan of merger that we entered into with Merrill Lynch & Co., Inc. on February 15, 2006 and approve the transactions contemplated thereby and aspects of the New BlackRock certificate of incorporation and by-laws that differ from BlackRock’s current certificate of incorporation and by-laws. Under the transaction agreement, a subsidiary of New BlackRock will merge with and into BlackRock, and BlackRock will become a subsidiary of New BlackRock, Inc. Each share of outstanding BlackRock class A common stock and class B common stock will be converted into one share of common stock of New BlackRock. Following the merger, Merrill Lynch will contribute Merrill Lynch Investment Managers, the business of Merrill Lynch engaged in investment management activities, to New BlackRock. New BlackRock will issue to Merrill Lynch 65 million shares of capital stock, subject to adjustment, divided between shares of New BlackRock common stock and non-voting series A convertible participating preferred stock. Merrill Lynch will hold no more than 45% of the voting power and 49.8% of the total capital stock of New BlackRock. Immediately after the merger, New BlackRock’s name will change to “BlackRock, Inc.” and its common stock will trade under BlackRock’s current ticker symbol, “BLK”, on the New York Stock Exchange.

The board of directors of BlackRock has determined that the merger is advisable, fair to, and in the best interests of BlackRock’s stockholders. The board of directors has approved the transaction agreement, the issuance of New BlackRock capital stock to Merrill Lynch and the other transactions contemplated by the transaction agreement. The board of directors unanimously recommends that you vote “FOR” adoption of the transaction agreement and approval of the merger contemplated thereby, “FOR” the issuance of New BlackRock capital stock to Merrill Lynch and “FOR” each proposal relating to the adoption of provisions of the New BlackRock certificate of incorporation.

At the special meeting, holders of our class A common stock and class B common stock who are entitled to vote will also be asked to approve an amendment to the BlackRock, Inc. 1999 Stock Award and Incentive Plan to increase the number of shares of BlackRock class A common stock authorized for issuance under the incentive plan from 14,000,000 to 17,000,000 shares. If the merger is completed, as of the effective time of the merger, the incentive plan will be assumed by New BlackRock. The board of directors unanimously recommends that you vote “FOR” approval of the amendment to the BlackRock, Inc. 1999 Stock Award and Incentive Plan.

The proposal to adopt the transaction agreement and approve the merger and each proposal relating to the adoption of provisions of the New BlackRock certificate of incorporation requires the vote in favor by a majority of the voting power of the issued and outstanding shares of class A common stock and class B common stock entitled to vote thereon, voting together as a single class, and by a majority of the issued and outstanding shares of class B common stock entitled to vote thereon. The proposal to approve the issuance of New BlackRock common stock to Merrill Lynch and the proposal to approve the amendment to BlackRock’s incentive plan each require the vote in favor by a majority of the voting power of the class A common stock and class B common stock present at the special meeting, voting together as a single class. The PNC Financial Services Group, Inc. has agreed that all of the shares of BlackRock capital stock owned by it and its affiliates, representing approximately 89% of the outstanding voting power of BlackRock and approximately 84% of the outstanding shares of class B common stock, will be voted in favor of each proposal to be considered at the special meeting.

You are requested to promptly vote your shares by completing, signing and dating the enclosed proxy card and returning it in the envelope provided, whether or not you plan to attend the special meeting.

This proxy statement/prospectus is a prospectus for the New BlackRock common stock to be issued to holders of our class A common stock and class B common stock in the transaction as well as a proxy statement for the special meeting of stockholders of BlackRock and describes the matters to be considered and voted upon at the special meeting. We urge all holders of our class A common stock and class B common stock to read this proxy statement/prospectus, including the section describing risk factors that begins on page 16.

Very truly yours,

Laurence D. Fink

Chairman and Chief Executive Officer

Based on the number of BlackRock shares outstanding on August 18, 2006, we expect that approximately 70,738,473 shares of New BlackRock common stock, par value $0.01 per share, will be issued in the merger.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the common stock to be issued under the registration statement of which this proxy statement/prospectus is a part or determined if this proxy statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus is dated August 23, 2006 and is first being mailed to stockholders on or about August 23, 2006.

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BLACKROCK, INC.

NOTICE OF A SPECIAL MEETING OF OUR STOCKHOLDERS

TO BE HELD ON SEPTEMBER 25, 2006

To Our Stockholders:

A special meeting of stockholders of BlackRock, Inc., will be held at The New York Palace Hotel, located at 455 Madison Avenue New York, New York, on September 25, 2006, at 3 p.m. local time, for the following purposes:

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Each of the eight proposals listed above is conditioned upon the others and the approval of each such proposal is required for completion of the transactions. None of (1) the merger, (2) the issuance of New BlackRock common stock to Merrill Lynch in consideration of Merrill Lynch’s contribution to New BlackRock of the entities and assets that constitute its investment management business, (3) the implementation of the provisions in New BlackRock’s certificate of incorporation and by-laws or (4) the implementation of the amendment to the BlackRock, Inc. 1999 Stock Award and Incentive Plan will take place unless all eight proposals are approved by BlackRock’s stockholders and the transactions are completed.

All of the above matters are more fully described in the accompanying proxy statement/prospectus. Our board of directors has established the close of business on August 3, 2006 as the record date for determining the stockholders entitled to notice of, and to vote at, the special meeting or any adjournment thereof. Only stockholders who hold shares of BlackRock’s class A common stock or class B common stock on the record date will be entitled to vote at the special meeting.

We urge you, whether or not you plan to attend the special meeting, to sign, date and mail the enclosed proxy card in the envelope provided. You may revoke your proxy at any time, or you may attend the special meeting in person and cast your vote in person on all matters submitted at the special meeting, in which case your proxy would be disregarded.

By order of our Board of Directors,

Robert P. Connolly

Managing Director, General Counsel

and Secretary

August 23, 2006

New York, New York

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NOTICE ABOUT INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS

You should rely only on the information contained in this proxy statement/prospectus or any supplement. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. You should disregard anything we said in an earlier document that is inconsistent with what is in or incorporated by reference in this proxy statement/prospectus.

You should assume that the information in this proxy statement/prospectus or any supplement is accurate only as of the date on the front page of this proxy statement/prospectus. Our business, financial condition, results of operations and prospects may have changed since that date and may change again.

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WHERE YOU CAN FIND MORE INFORMATION

BlackRock files annual, quarterly and current reports, proxy statements and other information with the United States Securities and Exchange Commission, which we sometimes refer to in this proxy statement/prospectus as the “SEC.” You may read and copy this information at the following location:

Public Reference Room

100 F Street, N.E.

Washington, DC 20549

Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. BlackRock’s public filings are also available to the public from document retrieval services and the Internet website maintained by the SEC at www.sec.gov.

New BlackRock has filed a registration statement on Form S-4 to register with the SEC the New BlackRock common stock that BlackRock’s stockholders will receive in connection with the merger. This proxy statement/prospectus is part of the registration statement on Form S-4 and is a prospectus of New BlackRock and a proxy statement for our special meeting.

No persons have been authorized to give any information or to make any representations other than those contained in this proxy statement/prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by New BlackRock or any other person.

This proxy statement/prospectus incorporates documents by reference that are not included in or delivered with this document. The SEC allows BlackRock to “incorporate by reference” the information that it files with it, which means that BlackRock can disclose important information to you by referring you to those documents. Documents that are incorporated by reference contain important information about BlackRock and its finances.

The documents incorporated by reference into this proxy statement/prospectus are available from BlackRock upon request by writing to or calling our Corporate Secretary at 40 East 52nd Street, New York, New York 10022, telephone (212) 810-5300. BlackRock will provide a copy of any and all of the information that is incorporated by reference in this proxy statement/prospectus (not including exhibits to the information unless those exhibits are specifically incorporated by reference into this proxy statement/prospectus) to any person, without charge, upon written or oral request. Any request for documents should be made by September 18, 2006 to ensure timely delivery of the documents.

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QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS

The following questions and answers are provided for your convenience and briefly address some commonly asked questions about the transactions and other matters to be considered at the special meeting. You should still carefully read this entire proxy statement/prospectus, including each of the annexes.

The approval of the issuance of New BlackRock capital stock to Merrill Lynch pursuant to the terms of the transaction agreement requires the affirmative vote of a majority of the total votes represented by the shares of our class A common stock and our class B common stock present in person or represented by proxy and entitled to vote on such matter, voting together as a single class. Consequently, an abstention from voting on the stock issuance proposal will have the same effect as a vote against this proposal.

The PNC Financial Services Group, Inc., which we sometimes refer to as “PNC” in this proxy statement/prospectus, has agreed to vote all of its BlackRock shares in favor of each proposal to be considered at the special meeting. PNC owns approximately 89% of our class B common stock and 84% of the combined voting power of our class A common stock and class B common stock.

Our class A common stock is traded on the New York Stock Exchange, and our class B common stock is generally held by PNC and certain of our employees. Therefore, unless you are affiliated with BlackRock, you hold our class A common stock.

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Corporate Secretary

BlackRock, Inc.

40 East 52^nd Street

New York, NY 10022

Third, you can attend the BlackRock special meeting and vote in person. Simply attending the meeting, however, will not revoke your proxy; you must vote at the meeting.

If you have instructed a broker to vote your shares, you must follow directions received from your broker to change your vote.

Corporate Secretary

BlackRock, Inc.

40 East 52nd Street

New York, NY 10022

(212) 810-5300

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SUMMARY

This summary may not contain all of the information that is important to you. You should read carefully the documents attached to and those referenced in this proxy statement/prospectus, including the transaction agreement and plan of merger, attached as Annex A, and the opinion of Citigroup Global Markets Inc., attached as Annex G. Unless otherwise indicated in this proxy statement/prospectus or the context otherwise requires, all references in this proxy statement/prospectus to “ BlackRock,” “we,” “the Company,” “our,” or “us” refer to BlackRock, Inc. or New BlackRock, Inc., as the context requires.

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SELECTED HISTORICAL FINANCIAL INFORMATION

MLIM—Summary of Selected Financial Data

The selected financial data presented below have been derived in part from, and should be read in conjunction with, the combined financial statements of the MLIM business and the management’s discussion and analysis of financial condition and results of operations included in this proxy statement/prospectus.

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BlackRock—Summary of Selected Financial Data

The selected financial data presented below have been derived in part from, and should be read in conjunction with, the consolidated financial statements of BlackRock and management’s discussion and analysis of financial condition and results of operations incorporated by reference into this proxy statement/prospectus.

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HISTORICAL AND PRO FORMA PER SHARE DATA

The following table shows selected historical per share data for BlackRock and unaudited pro forma per share data for New BlackRock. The pro forma data give effect to the transactions as if they had occurred on January 1, 2005. We compute basic earnings per share based upon the weighted average number of shares of common stock outstanding during the period presented. We include shares of common stock granted to our officers and employees in the computation only after the shares become fully vested. We compute diluted earnings per share based upon the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the periods presented. The diluted earnings per share computations include the dilutive impact of options to purchase common stock which were outstanding during the period calculated by the “treasury stock” method, unvested stock grants and other restricted awards to directors, officers and employees and the dilutive impact of the assumed conversion of the $250 million principal amount of our 2.625% Convertible Debentures due 2035 (see Note 18 to the financial statements contained in our annual report on Form 10-K for the year ended December 31, 2005, which is incorporated herein by reference). The pro forma data give effect to the issuance of the total number of shares to be issued in the merger (based on the weighted average number of shares outstanding during the year ended December 31, 2005 and the six months ended June 30, 2006).

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GLOBAL MARKET ACTIVITY

During the first quarter of 2006, the global financial markets experienced appreciation. However, subsequent to the first quarter, the markets have experienced a decline. The financial results contained herein, including the pro forma condensed combined statements of income, do not reflect the subsequent market decline. For a discussion of the potential effects on our revenues of changes in securities markets, see “Risk Factors—Business-Related Risks—Change in the securities markets could lead to a decline in revenues” included in BlackRock’s Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2005, which is incorporated into this proxy statement/prospectus by reference. Following the completion of the transactions, volatility in global financial markets may have a greater impact on the revenue of the combined company, particularly in light of the substantial international orientation of the MLIM business, including the significant portion of MLIM’s assets under management generated by Merrill Lynch’s Global Private Client group. Moreover, in light of the higher degree of exposure of the MLIM business to equity markets, volatility in the prices of equity securities may have a greater impact on the revenue of the combined company. See “Risk Factors—Loss of market share with Merrill Lynch’s Global Private Client group could harm operating results of New BlackRock” and “—MLIM’s various businesses may be adversely impacted by global market and economic conditions that may cause fluctuations in interest rates, exchange rates, equity and commodity prices and credit spreads.”

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PER SHARE MARKET PRICE INFORMATION

Shares of our class A common stock are listed on the New York Stock Exchange (which we sometimes refer to as the “NYSE”) under the symbol “BLK.” There is no established trading market for our class B common stock.

The following table sets forth for the periods indicated the high and low reported sale prices and dividends paid per share for the class A common stock as reported on the NYSE:

On January 19, 2006, the last trading day before press reports about a business combination transaction involving BlackRock were first published, the closing price of our class A common stock was $119.88. On August 18, 2006, the most recent practicable date before the filing of this proxy statement/prospectus, the closing price of our class A common stock was $133.05.

Dividend Policy

In connection with its approval of the transaction agreement, the board of directors of New BlackRock adopted a dividend policy establishing a 40% targeted payout ratio, with all subsequent quarterly dividend declarations under such policy remaining subject to the board’s fiduciary discretion. The PNC implementation and stockholder agreement provides that New BlackRock will not revise the dividend payout ratio downward, except in furtherance of its board of directors’ fiduciary duties or other prudential financial considerations.

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RISK FACTORS

You should carefully consider the following risk factors relating to the transactions and to ownership of BlackRock and New BlackRock common stock. You should also consider the other information included or referred to in this proxy statement/prospectus. See “Where You Can Find More Information” for directions on how to obtain additional information.

Our business, financial condition or results of operations could be materially adversely affected by any of these risks. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.

This proxy statement/prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this proxy statement/prospectus. See “Forward-Looking Statements.”

Risks Related to the Transactions

The combination of the BlackRock business with the MLIM business creates numerous risks and uncertainties which could adversely affect our profitability.

Strategic transactions, like the combination of the BlackRock business with the MLIM business, create numerous uncertainties and risks. The MLIM business will transition from being a part of Merrill Lynch to being a part of New BlackRock, which will entail many changes, including the integration of MLIM’s domestic and international business and personnel with our existing business and personnel, and changes in systems and employee benefit plans. These transition activities are complex, and we may encounter unexpected difficulties, or incur unexpected costs, in any of them, including:

As a result, we may not be able to realize the expected revenue growth and other benefits that we hope to achieve from the transactions. In addition, we may be required to spend additional time or money on integration that would otherwise be spent on the development and expansion of our business and services.

The market price for New BlackRock common stock may be affected by factors different from those that currently affect the shares of BlackRock.

Upon completion of the transactions, holders of shares of our common stock will become holders of New BlackRock common stock. Because the business of New BlackRock will include the business of BlackRock and the MLIM business, the results of operations of the combined company will be affected by factors different from those currently affecting the results of operations of BlackRock. Following the completion of the transactions, the market price of New BlackRock common stock will reflect risks associated with the MLIM business, the

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nature and extent of which may be different than the nature and extent of the risks associated with BlackRock common stock prior to the transactions. For a discussion of the risks associated with the MLIM business, see “—Risks Related to the MLIM Business and Distribution Arrangements.” For a discussion of BlackRock’s current business and certain factors to consider in connection with the business, see the documents incorporated by reference in this proxy statement/prospectus and referred to under “Where You Can Find More Information.”

Our failure to complete the transactions could cause us to incur significant fees and expenses and could lead to negative perceptions among investors, potential investors and clients.

In the event the transactions are not completed, BlackRock will bear certain fees and expenses associated with the transactions, which may be significant. BlackRock has incurred, and expects to continue to incur, costs associated with consummating the transactions, including investment banking fees of $20 million and $19 million of integration costs incurred through June 30, 2006. Investors, potential investors and clients may consider the failure to complete the transactions to be a significantly negative development regarding BlackRock. The market price of BlackRock’s common stock may reflect positive market assumptions that the transactions will be completed and the related benefits will be realized. As a consequence of any or all of the foregoing, BlackRock’s stock price may be negatively impacted by the failure to complete the transactions.

The transactions are subject to various regulatory approvals, client consents, approval by our stockholders and other customary closing conditions prior to consummation.

The transactions, which have been approved by the boards of directors of BlackRock, New BlackRock, PNC and Merrill Lynch, are subject to various regulatory approvals, client consents, approval by our stockholders and other customary closing conditions. If the necessary approvals are not met by the contractual deadline of January 31, 2007, the transactions may not be completed, which could cause BlackRock’s earnings or stock price to decline.

Uncertainties associated with the transactions or the combined company may cause us to lose clients.

In response to the announcement of the transactions, clients and potential clients of our business and the MLIM business may delay or defer decisions concerning their use of the products and services of MLIM and BlackRock and may withdraw assets under management. The transactions will require approval by the U.S. registered investment companies advised by MLIM of new investment advisory agreements to take effect upon the completion of the transactions and consent by other clients, including certain collective investment vehicles that are not registered U.S. investment companies. Any failure to obtain required approvals or consents could have an adverse impact on the amount of assets under management of the combined company following the completion of the transactions.

We do not believe that the transactions will be an assignment of the current investment management agreements or sub-advisory agreements of the U.S. registered investment companies advised by us under the Investment Company Act of 1940; however, it is possible that the transactions could be determined to be such an assignment, which would result in the automatic termination of each of those agreements. Due to the possibility of termination of the contracts, each of the U.S. registered investment companies advised by us is submitting a new investment management agreement and, if applicable, new sub-advisory agreement to its shareholders for approval to prevent any potential disruption in our ability to continue to provide services to those investment companies after completion of the transactions. The new agreements will be effective upon completion of the transactions.

Clients of MLIM and our clients may terminate investment management contracts or withdraw funds at will or on short notice. Concerns about the transactions could cause both institutional and individual clients to terminate their relationships with us or MLIM and to reduce the aggregate amount of assets under management, or shift their assets to other types of accounts with different rate structures. Any number of other factors could also lead to such changes, including poor investment performance, changes in prevailing interest rates, changes

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in investment preferences of clients, changes in our reputation or MLIM’s reputation in the marketplace, changes in management or control of clients or third party distributors with whom we have relationships, loss of key investment management personnel and financial market performance. We have, from time to time, lost separate accounts because of corporate mergers and restructurings, and we could lose accounts due to the transactions contemplated by the transaction agreement or under other circumstances, such as adverse market conditions or poor performance. Any of these matters could have an adverse effect on our business, amount of assets under management, results of operations or financial condition following the transactions.

Loss of key personnel could lead to loss of clients and a decline in our revenues.

Our success after the completion of the transactions will depend in part upon our ability to retain key employees. Competition for qualified personnel in the asset management industry can be very intense. In addition, key employees may depart because of issues relating to the difficulty of integration. We have encouraged the continued retention of executives and other key personnel through measures such as providing deferred compensation and competitive annual and long-term compensation arrangements. We have also provided retention incentives for individuals who will be a part of the combined business to take effect after the completion of the transactions. However, these measures may not succeed in retaining all key personnel. If we are unable to attract and retain qualified individuals or our costs to do so increase significantly, our business could be materially adversely affected. In addition, since many of the individual employees at our subsidiaries often maintain a strong, personal relationship with our clients based on the clients’ trust in the employee, the departure of one or more of these employees could cause the subsidiary to lose client accounts, which could have a material adverse effect on our results of operations and financial condition.

Following the completion of the transactions, for so long as Merrill Lynch and PNC maintain certain levels of stock ownership, Merrill Lynch and PNC will vote as stockholders in accordance with the recommendation of New BlackRock’s board of directors, and certain actions will require special board approval or the prior approval of Merrill Lynch and PNC.

As a result of the arrangements to be established in the transactions, together with the ownership structure of the combined company, stockholders may have no effective power to influence corporate actions. Upon the completion of the transactions, Merrill Lynch will own 45% of New BlackRock’s issued and outstanding common stock, and up to 49.8% of the total capital stock of New BlackRock on a fully-diluted basis, and PNC will own approximately 34% of New BlackRock’s issued and outstanding capital stock.

Merrill Lynch and PNC have agreed to vote all of their shares in accordance with the recommendation of New BlackRock’s board of directors to the extent consistent with the provisions of the agreements described under “The Transactions—The Stockholder Agreements.” As a consequence, matters submitted to a stockholder vote, including elections of directors, will be approved or disapproved solely in accordance with the determinations of the board of directors (which, in addition to directors designated by New BlackRock management, Merrill Lynch and PNC, will include a majority of independent directors), so long as the shares held by Merrill Lynch and PNC constitute a majority of the outstanding shares. This arrangement will have the effect of concentrating control over New BlackRock in the board of directors, whether or not stockholders agree with any particular determination of the board.

Additionally, under the Merrill Lynch stockholder agreement and the PNC implementation and stockholder agreement, New BlackRock may not undertake certain actions without the prior approval of all of the independent directors or two-thirds of the directors then in office, and the following actions require prior approval of Merrill Lynch and PNC:

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Under the Merrill Lynch stockholder agreement, New BlackRock may not enter into any of the following transactions without the prior approval of Merrill Lynch:

Under the PNC implementation and stockholder agreement, New BlackRock may not enter into any of the following transactions without the prior approval of PNC:

As a result of the arrangements described in the foregoing summary, while Merrill Lynch and PNC maintain their stock ownership: New BlackRock will be required to obtain the consent of Merrill Lynch or PNC, or both, to undertake the transactions specified above; the board of directors will control the outcome of all matters submitted to a stockholder vote; and stockholders may have no power to influence the outcome of any stockholder vote or the determination by New BlackRock to undertake or forego any action.

See “The Transactions—The Stockholder Agreements.”

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Risks Related to the MLIM Business and Distribution Arrangements

Upon completion of the transactions, Merrill Lynch will be a primary distributor of New BlackRock’s products, and New BlackRock will therefore be subject to risks associated with the business of Merrill Lynch.

Pursuant to the global distribution agreement with Merrill Lynch, which will become effective upon the completion of the transactions, Merrill Lynch will distribute New BlackRock’s asset management products and services through its various distribution channels and will become a primary distributor of New BlackRock’s products. New BlackRock may not be successful in distributing products through Merrill Lynch or in distributing our products and services through other third party distributors, and the transfer of the MLIM business to New BlackRock might have an adverse effect on Merrill Lynch’s ability to distribute, and on the costs of distributing, existing products and services of BlackRock and MLIM. If we are unable to distribute our products and services successfully or if we experience an increase in distribution related expenses following the completion of the transactions, our business, results of operations or financial condition may be adversely affected.

Loss of market share with Merrill Lynch’s Global Private Client group could harm operating results of New BlackRock.

A significant portion of MLIM’s revenue comes from assets under management generated by Merrill Lynch’s Global Private Client group (“GPC”). During the first quarter of 2006, 45% of MLIM’s assets under management were in GPC accounts. New BlackRock’s ability to maintain a strong relationship with GPC is material to its future performance. If one of our competitors gains significant additional market share within the GPC retail channel, then New BlackRock’s business, results of operations or financial condition might be negatively impacted.

MLIM’s various businesses may be adversely impacted by global market and economic conditions that may cause fluctuations in interest rates, exchange rates, equity and commodity prices and credit spreads.

The financial services industry and the global financial markets are influenced by numerous unpredictable factors including economic conditions, monetary and fiscal policies, the liquidity of global markets, availability and cost of capital, international and regional political events, acts of war or terrorism and investor sentiment. Changes in these factors may adversely impact investment performance, which can affect MLIM’s profitability. The MLIM business has a greater degree of exposure than the existing BlackRock business to global market and economic conditions. Moreover, the MLIM business has a greater degree of exposure to market conditions for equity securities within and outside of the U.S. Upon completion of the transactions, therefore, the market price of New BlackRock common stock will reflect the risks associated with global financial markets and the risks associated with volatility in the prices of equity securities to a greater degree than the BlackRock common stock alone has reflected such risks. In addition, MLIM is subject to non-trading market risk as a result of the risks associated with its investment securities. See “MLIM Risk Management—Market Risk” below.

Legal proceedings could adversely affect MLIM’s operating results and financial condition for a particular period.

MLIM entities have been named as a defendant in various legal actions, including arbitrations, class actions, and other litigation arising in connection with its activities.

MLIM may explore potential settlements before a case is taken through trial because of uncertainty and risks inherent in the litigation process. In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 5, Accounting for Contingencies, MLIM will accrue a liability when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In many lawsuits it is not possible to determine whether a liability has been incurred or to estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case no accrual is made until that time. In view of the inherent

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difficulty of predicting the outcome of such matters, particularly in cases in which claimants seek substantial or indeterminate damages, MLIM cannot predict what the eventual loss or range of loss related to such matters will be, which may be material to its operating results or cash flows for any particular period. See “MLIM Risk Management—Litigation Risk” below.

MLIM’s businesses are highly regulated and could be adversely impacted by regulatory and legislative initiatives around the world.

MLIM’s business may be adversely impacted by regulatory and legislative initiatives imposed by various U.S. and non-U.S. regulatory and exchange authorities, and industry participants that continue to review and, in many cases, adopt changes to their established rules and policies. See “MLIM Risk Management—Regulatory and Legislative Risks” below.

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FORWARD-LOOKING STATEMENTS

Certain statements in this proxy statement/prospectus constitute “forward-looking statements.” We have based these forward-looking statements on our current expectations and projections about future events. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” or similar expressions. BlackRock cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and BlackRock assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance. In addition to factors previously disclosed in BlackRock’s SEC reports and those identified elsewhere in this proxy statement/prospectus, including those matters discussed under the caption “Risk Factors,” the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance:

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SPECIAL MEETING OF OUR STOCKHOLDERS

General

The board of directors of BlackRock, Inc. hereby solicits your proxy on our behalf for use at a special meeting of our stockholders and at any postponements or adjournments of the special meeting. The special meeting will be held at The New York Palace Hotel, located at 455 Madison Avenue, New York, New York, on September 25, 2006 at 3 p.m. local time.

Unless otherwise indicated in this proxy statement/prospectus or the context otherwise requires, all references in this proxy statement/prospectus to “BlackRock,” “we,” “our” or “us” refer to BlackRock, Inc. or New BlackRock, Inc., as the context requires.

Matters to be Considered

At the special meeting, you will be asked:

1. to consider and vote upon a proposal to adopt the transaction agreement and plan of merger, dated as of February 15, 2006, by and among Merrill Lynch & Co., Inc., BlackRock, Inc., New BlackRock, Inc. and BlackRock Merger Sub, Inc. and approve the merger contemplated thereby, pursuant to which BlackRock Merger Sub, Inc. will be merged with and into BlackRock, with BlackRock surviving the merger as an indirect wholly owned subsidiary of New BlackRock, Inc., and in which each share of issued and outstanding BlackRock class A common stock and each share of issued and outstanding BlackRock class B common stock will be converted into one share of common stock of New BlackRock;

2. to consider and vote upon a proposal to approve, in consideration for its contribution to New BlackRock of the entities and assets that constitute its investment management business, the issuance by New BlackRock to Merrill Lynch of 65 million shares of capital stock of New BlackRock, subject to adjustment, which will be divided between shares of New BlackRock common stock and shares of newly-issued non-voting series A convertible participating preferred stock such that Merrill Lynch will hold no more than 45% of the voting power of New BlackRock and no more than 49.8% of the total capital stock of New BlackRock on a fully-diluted basis following the completion of the transactions;

3. to consider and vote upon a proposal to approve provisions in New BlackRock’s certificate of incorporation and by-laws that state that, except as otherwise provided by law or the stockholder agreements with Merrill Lynch and PNC, at all meetings of the board of directors, a majority of the entire board of directors shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors.

4. to consider and vote upon a proposal to approve provisions in New BlackRock’s certificate of incorporation and by-laws that provide that the certificate of incorporation and by-laws may only be amended or modified in accordance with the provisions of the stockholder agreement with Merrill Lynch and the implementation and stockholder agreement with PNC, each of which was entered into in connection with the transactions described above in Proposals 1 and 2;

5. to consider and vote upon a proposal to approve provisions in New BlackRock’s certificate of incorporation authorizing 1 billion shares of capital stock, including 500 million shares of common stock and 500 million shares of preferred stock;

6. to consider and vote upon a proposal to approve provisions in New BlackRock’s certificate of incorporation and by-laws permitting action by written consent of stockholders if such action has been approved in advance by the board of directors;

7. to consider and vote upon a proposal to approve provisions in New BlackRock’s certificate of incorporation and by-laws permitting the number of directors on New BlackRock’s board of directors to be changed by a vote of a majority of the entire board of directors;

8. to consider and vote upon a proposal to approve a provision in New BlackRock’s certificate of incorporation providing that New BlackRock will be subject Section 203 of the General Corporation Law of the State of Delaware, which governs certain business combinations with interested stockholders;

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9. to consider and vote upon a proposal to approve an amendment to the BlackRock, Inc. 1999 Stock Award and Incentive Plan (which will be assumed by New BlackRock if the merger described above is completed, as of the effective time of the merger) to increase the number of shares of BlackRock class A common stock authorized for issuance under the incentive plan from 14,000,000 to 17,000,000 shares; and

10. to transact any other business as may properly come before the special meeting or any adjournments thereof.

Each of the nine proposals listed above is conditioned upon the others and the approval of each such proposal is required for completion of the transactions. None of (1) the merger, (2) the issuance of New BlackRock common stock to Merrill Lynch in consideration of Merrill Lynch’s contribution to New BlackRock of the entities and assets that constitute its investment management business, (3) the implementation of the provisions in New BlackRock’s certificate of incorporation or by-laws or (4) the implementation of the amendment to the BlackRock, Inc. 1999 Stock Award and Incentive Plan will take place unless all nine proposals are approved by BlackRock’s stockholders and the transactions are completed.

Record Date

Our board of directors has established the close of business on August 3, 2006 as the record date for determining the holders of voting securities entitled to notice of, and to vote at, the special meeting. As of the date of this proxy statement/prospectus, we had outstanding and entitled to vote 20,072,356 shares of our class A common stock, par value $0.01 per share, and 44,914,144 shares of our class B common stock, par value $0.01 per share.

Voting Rights, Quorum, Broker Voting and Required Vote

Voting Rights. Our class A common stockholders and our class B common stockholders are entitled to vote together as a single class on each proposal to be considered at the special meeting. Our class B common stockholders are also entitled to vote separately as a class on the adoption of the transaction agreement and the approval of the merger and on each proposal relating to the adoption of provisions of the New BlackRock certificate of incorporation. Each share of our class A common stock is entitled to one vote and each share of our class B common stock is entitled to five votes. Consequently, on those matters upon which our class A common stockholders and our class B common stockholders are entitled to vote together as a class, a total of 20,072,356 votes may be cast by our class A common stockholders and a total of 224,570,720 votes may be cast by our class B common stockholders. Our directors and officers own in the aggregate approximately 8% of our class B common stock and 8% of the combined voting power of our class A common stock and class B common stock. The PNC Financial Services Group, Inc. has agreed to vote or cause to be voted all of the shares of BlackRock capital stock owned by it and its affiliates, representing approximately 84% of the outstanding voting power of BlackRock and approximately 89% of the outstanding shares of class B common stock, in favor of each proposal to be considered at the special meeting.

Quorum. With respect to the adoption of the transaction agreement and the approval of the merger and the approval of the issuance of New BlackRock capital stock to Merrill Lynch by our class A common stockholders and our class B common stockholders voting together as a single class, and any other matter that may be presented at the special meeting, stockholders holding shares of our capital stock representing a majority of the votes entitled to be cast on these matters will constitute a quorum. A majority of the outstanding votes of our class B common stock that are represented in person or by proxy will constitute a quorum for purposes of the separate class vote of our class B common stockholders to adopt the transaction agreement and approve the merger.

Shares that are represented at the special meeting but abstain from voting on any or all matters and shares that are “broker non-votes” (i.e., shares held by brokers or nominees that are represented at the special meeting but with respect to which the broker or nominee does not have discretionary power to vote on a particular matter and has received no instructions from the beneficial owners thereof or persons entitled to vote thereon) will be counted in determining whether a quorum is present at the special meeting.

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Broker Voting. The proposals to adopt the transaction agreement and approve the merger, to approve the issuance of New BlackRock capital stock to Merrill Lynch, to approve the provisions in New BlackRock’s certificate of incorporation and to approve the amendment to the BlackRock, Inc. 1999 Stock Award And Incentive Plan are not items on which brokerage firms may vote in their discretion on behalf of their clients if their clients have not furnished voting instructions. For this reason, failing to instruct a broker, bank or other nominee how to vote shares held in their name for you will have the same effect as voting against these proposals.

Required Vote for Adoption of the Transaction Agreement and Approval of the Merger and Approval of the Provisions in New BlackRock’s Certificate of Incorporation and By-Laws. The affirmative vote of (i) a majority of the total votes represented by the shares of our class A common stock and our class B common stock issued and outstanding and entitled to vote, voting together as a single class, and (ii) the holders of a majority of our class B common stock issued and outstanding and entitled to vote are required for the adoption of the transaction agreement and the approval of the merger contemplated thereby and the approval of the provisions in New BlackRock’s certificate of incorporation and by-laws. Consequently, a failure to vote, an abstention from voting on the proposal or a broker non-vote (if any) will have the effect of a negative vote with respect to each such proposal.

Required Vote for Approval of the Issuance of New BlackRock Capital Stock to Merrill Lynch and Approval of the Amendment to the BlackRock, Inc. 1999 Stock Award and Incentive Plan. The affirmative vote of a majority of the total votes represented by the shares of our class A common stock and our class B common stock present in person or represented by proxy and entitled to vote on each such matter is required to approve the issuance of New BlackRock capital stock to Merrill Lynch pursuant to the terms of the transaction agreement and to approve the amendment to the BlackRock, Inc. 1999 Stock Award and Incentive Plan. Consequently, an abstention from voting on the proposal or a broker non-vote (if any) will have the effect of a negative vote with respect to each such proposal.

Proxies

Each executed and returned proxy will be voted according to the instructions indicated on that proxy. However, if no instructions are indicated, the proxy will be voted according to the recommendations of our board of directors contained in this proxy statement/prospectus.

Our board of directors does not intend to present, and has no information that others will present, any business at the special meeting that requires a vote on any other matter. If any other matter requiring a vote properly comes before the special meeting, the proxyholders will vote the proxies that they hold in accordance with their best judgment, including voting them to adjourn the special meeting to another time if a quorum is not present at the special meeting or if they believe that an adjournment is in our best interest.

You have the power to revoke your proxy at any time before the shares it represents are voted. A revocation will be effective upon receipt, at any time before the special meeting is called to order, by our secretary of either (i) an instrument revoking your proxy or (ii) a proxy duly executed by you bearing a later date than the preceding proxy. Additionally, you may change or revoke a previously executed proxy by voting in person at the special meeting.

Certain Reimbursements

We will bear the cost to solicit proxies. We will also reimburse banks, brokers, custodians, fiduciaries, nominees, securities dealers, trust companies and other persons for the reasonable expenses that they incur when forwarding this proxy statement/prospectus and the accompanying materials to the beneficial owners of shares of our class A common stock and our class B common stock. Our directors and officers also may solicit proxies from our stockholders and other persons by any of the means described above. We will not pay these directors and officers any extra compensation for participating in this solicitation.

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THE TRANSACTIONS

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PROPOSAL 1

ADOPTION OF THE TRANSACTION AGREEMENT

AND APPROVAL OF THE MERGER

We are asking you to consider and vote upon a proposal to adopt the transaction agreement and plan of merger, dated as of February 15, 2006, by and among Merrill Lynch, BlackRock, New BlackRock and BlackRock Merger Sub and approve the merger contemplated thereby, pursuant to which BlackRock Merger Sub, Inc. will be merged with and into BlackRock, with BlackRock surviving the merger as an indirect wholly owned subsidiary of New BlackRock, and in which each share of issued and outstanding BlackRock class A common stock and each share of issued and outstanding BlackRock class B common stock will be converted into one share of common stock of New BlackRock.

This Proposal 1 is conditioned on the approval of Proposals 2, 3, 4, 5, 6, 7, 8 and 9, and the approval of each of Proposals 1-9 is required for completion of each of the transactions.

The BlackRock board of directors unanimously recommends that the BlackRock stockholders vote “FOR” Proposal 1, the adoption of the transaction agreement and plan of merger and the approval of the transactions, including the merger, contemplated thereby.

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PROPOSAL 2

APPROVAL OF THE ISSUANCE OF NEW BLACKROCK CAPITAL STOCK TO MERRILL LYNCH

We are asking you to consider and vote upon a proposal to approve, in consideration of Merrill Lynch’s contribution to New BlackRock of the entities and assets that constitute its investment management business, the issuance by New BlackRock to Merrill Lynch of 65 million shares of capital stock of New BlackRock, subject to adjustment, which will be divided between shares of New BlackRock common stock and shares of newly issued non-voting series A convertible participating preferred stock such that Merrill Lynch will hold no more than 45% of the voting power of New BlackRock and no more than 49.8% of the total capital stock of New BlackRock on a fully-diluted basis.

Under Rule 312.03 of the New York Stock Exchange, a company listed on the New York Stock Exchange is required to obtain stockholder approval before the issuance of common stock, or securities convertible into or exercisable for common stock, if the common stock issued in a transaction exceeds 20% of the shares of common stock of the corporation outstanding immediately before the effectiveness of the transaction. Immediately after the effective time of the merger, New BlackRock will issue approximately 65 million shares of its common stock to Merrill Lynch and its affiliates. The aggregate number of shares of New BlackRock common stock to be so issued will exceed 20% of the shares of New BlackRock common stock outstanding, and for this reason we are required to obtain approval of the stockholders for the issuance of these securities to Merrill Lynch.

This Proposal 2 is conditioned on the approval of Proposals 1, 3, 4, 5, 6, 7, 8 and 9, and the approval of each of Proposals 1-9 is required for completion of each of the transactions.

The BlackRock board of directors unanimously recommends that the BlackRock stockholders vote “FOR” Proposal 2, the approval of the issuance of capital stock to Merrill Lynch in consideration of the MLIM contribution.

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BACKGROUND OF THE TRANSACTIONS

From time to time, we have received inquiries from various parties interested in pursuing a strategic transaction involving our investment advisory operations. Our executive officers have considered those inquiries and have periodically informed our board of directors of inquiries received. In the fourth quarter of 2005, we engaged Citigroup Global Markets Inc. as our financial advisor in connection with evaluating certain inquiries.

On January 17, 2006, Laurence D. Fink, our Chairman and Chief Executive Officer, met with E. Stanley O’Neal, the Chairman, Chief Executive Officer and President of Merrill Lynch, to discuss the possibility of a transaction involving a combination of the MLIM business and BlackRock. Shortly thereafter, Merrill Lynch delivered to us initial materials describing general terms of a proposed transaction, including a preliminary proposed range of valuation for the MLIM business. Discussions between the parties concerning these materials and other aspects of a proposed transaction ensued.

Members of our senior management, including Susan Wagner, our Chief Operating Officer, advised by Citigroup and Skadden, Arps, Slate, Meagher & Flom LLP, our outside legal counsel, then began a series of meetings with Merrill Lynch representatives including Eric Heaton, Senior Vice President and Co-Head of the Financial Institutions Group, Americas, of Merrill Lynch, and Sullivan & Cromwell LLP, Merrill Lynch’s outside legal counsel, to discuss terms of the transaction. PNC and its financial advisor, Credit Suisse Securities (USA) LLC, and outside legal counsel, Wachtell, Lipton, Rosen & Katz, were periodically apprised of the discussions.

On January 25, 2006, we delivered to Merrill Lynch a preliminary term sheet describing a transaction in which Merrill Lynch would contribute the MLIM business to BlackRock in return for BlackRock equity securities representing an economic ownership interest on a basic share basis in the range of 48 to 49% of the combined company. Following delivery of the term sheet, the parties discussed alternative terms proposed by Merrill Lynch and negotiated to develop mutually acceptable terms.

At a meeting of our board of directors on January 31, 2006, senior management and our advisors apprised our board of directors of potential terms of the proposed transaction, including a proposal to issue to Merrill Lynch 60.3 to 61.5 million shares of BlackRock common stock, representing an economic ownership interest on a basic share basis of 48.5 to 49% of the combined company, in return for the contribution by Merrill Lynch to BlackRock of the MLIM business. The board of directors concluded that our management should continue discussions with Merrill Lynch.

Shortly thereafter, each of the parties made presentations to management of the other party regarding its business and operations, and each party commenced its business, financial and legal due diligence review of the other’s business. We delivered to Merrill Lynch a draft transaction agreement on February 2, 2006, and the parties continued to have significant discussions and negotiations regarding proposed valuation and transaction structures. In the course of these discussions consensus was reached on various structural, tax and related valuation issues and we continued to periodically update our board regarding discussions with Merrill Lynch and other interested parties. We simultaneously engaged in discussions with PNC regarding potential changes in our board and governance arrangements with PNC in connection with the transaction involving the MLIM business. In connection with these discussions with PNC, and to document similar potential arrangements with Merrill Lynch, we commenced discussions with each of PNC and Merrill Lynch regarding terms of stockholder agreements to be entered into by us with each of them in connection with the transaction involving the MLIM business.

Our board of directors met with our management and our legal and financial advisors on February 13, 2006 to review and consider the terms of the proposed transaction, which had been revised to provide for the issuance of a total of 65 million shares to Merrill Lynch, including non-voting shares of preferred stock. At that meeting, the board received presentations from management, including presentations as to the status of the transactions, and Citigroup reviewed its financial analysis of the proposed transaction. Skadden, Arps then reviewed the

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obligations of the directors in considering the transactions and the terms of the transaction agreement and the related documents and presented summaries of the pricing terms, representations, covenants, conditions, indemnity provisions, termination events and consequences of termination of the transaction agreement; the terms of the global distribution agreement; and the terms of the separate stockholder agreements with PNC and Merrill Lynch, including the voting and other arrangements in respect of the board and our status as an independently managed public company.

On February 14, 2006, our board of directors again met with our management and legal and financial advisors to review and consider the terms of the proposed transaction. Citigroup updated its financial analyses with respect to the proposed transaction and rendered its oral opinion, subsequently confirmed in writing, that, as of the date of the opinion and based upon and subject to the assumptions, limitations and considerations described in the opinion, the aggregate 65 million newly-issued shares of New BlackRock common stock and non-voting series A convertible participating preferred stock to be issued by New BlackRock in exchange for Merrill Lynch’s contribution of the MLIM business pursuant to the transaction agreement was fair, from a financial point of view, to New BlackRock. Skadden, Arps then reviewed certain legal aspects of the proposed transactions, including the legal standards applicable to the board’s decisions and actions with respect to the proposed transaction.

After further discussion, all of the directors approved the transaction agreement and the transactions contemplated by that agreement, including the merger to restructure our holding company, the contribution of the MLIM business by Merrill Lynch to New BlackRock and the issuance of New BlackRock capital stock to Merrill Lynch in consideration of the contribution, as well as the related agreements, including the separate stockholder agreements with PNC and Merrill Lynch. The parties executed the transaction agreement in the early morning hours of February 15, 2006 and announced the transaction to the public before the opening of trading on that date.

Reasons for the Transactions

Our board of directors expects the transactions to create one of the world’s largest asset management firms. The new company is expected to have approximately $1 trillion in assets under management and offer a full range of equity, fixed income, cash management and alternative investment products, with strong representation in both retail and institutional channels, in the U.S. and in non-U.S. markets.

In reaching its determination to recommend adoption of the transaction agreement and approval of the transactions contemplated thereby, including the merger, our board of directors consulted with management, as well as our financial advisor and our outside legal counsel, and considered various material factors which it believed would contribute to the success of the combined company, including the potential benefits and opportunities listed below:

BlackRock’s Business, Financial Condition and Prospects. The board of directors considered information with respect to the financial condition, results of operations and business of BlackRock, on both a historical and prospective basis, and current industry, economic and market conditions. In particular, the board of directors considered BlackRock’s growth opportunities without the MLIM business compared with the growth opportunities available to New BlackRock after contribution of the MLIM business. The board found that the transactions should increase opportunities for growth, because the combined company will have broad investment and risk management capabilities and extraordinary global scale that will enhance its ability to serve individual and institutional investors in growing markets worldwide.

Business, Condition and Prospects of the MLIM Business. The board of directors considered information with respect to the financial condition, results of operations and business of MLIM, including the due diligence review by BlackRock’s management, with the assistance of its financial and legal advisors, of the financial condition and prospects of the MLIM business. In particular, the board considered the market position of the MLIM mutual fund family, the diversity of products across asset classes in the MLIM asset management portfolio, the quality of the MLIM products and the historical operating results

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and prospects of the MLIM business. The board found that MLIM’s strong retail presence in the U.S. and its strong reputation in Europe and Asia compliment BlackRock’s global institutional client base; that MLIM has a diverse range of products across asset classes, including equity assets, in its asset management portfolio; that MLIM’s products enjoy an excellent reputation for quality; and that MLIM has produced strong operating results in recent years.

Access to Merrill Lynch Distribution Network. The board of directors observed that Merrill Lynch’s global network of retail and institutional clients, including clients in the European market area, will provide New BlackRock with substantial new opportunities for distributing its investment management products.

Talent Pool. The board of directors considered the scope, experience and expertise of the employees of the MLIM business and found that MLIM has a deep pool of talented professionals who share a commitment to teamwork, excellence and integrity.

The Potential for Value-Enhancing Results. The board of directors noted that the contribution of the MLIM business should produce positive pro forma and prospective impacts on the results of operations of BlackRock, including the potential for accretion in earnings per share for BlackRock stockholders.

Preservation of Autonomy and Independence. The board of directors concluded that the transactions will assure the autonomy and independence of New BlackRock, including through the maintenance of a majority of independent directors on the board of directors and committees of the board and the agreement of PNC and Merrill Lynch to vote their shares in accordance with the recommendation of the board of directors.

Structure of the Transaction. The board of directors considered the structure of the transaction, including the fact that the merger is intended to qualify as a tax-free reorganization.

Terms of the Transaction. The board of directors considered the terms and provisions of the transaction agreement and related agreements, including provisions permitting the BlackRock board of directors to receive unsolicited inquiries and proposals from third parties regarding alternative transactions and, under certain circumstances, to negotiate and give information to any such parties.

The Likelihood of Completing the Transaction. The board of directors considered the likelihood of completing the transaction, including the terms of the transaction agreement and the conditions to completing the transaction.

Impact on Clients and Employees. The board of directors considered the impact of the transactions on BlackRock’s clients and employees. The board believed that the cultures of BlackRock and MLIM are highly compatible and complementary and that the transactions will preserve BlackRock’s identity and freedom to control its interactions and relationships with its clients.

Integration of the MLIM Business with New BlackRock. The board of directors expected that, while the strengths of BlackRock and MLIM are complementary and afford potential growth opportunities to the combined company, meaningful opportunities for the realization of synergies should also arise because of overlaps in certain products and the consolidation of certain operations.

Opinion of Citigroup. The board of directors considered the opinion, delivered orally on February 14, 2006 and subsequently confirmed in writing, of Citigroup Global Markets Inc., BlackRock’s financial advisor, to the effect that, as of the date of such opinion and based upon and subject to the assumptions, limitations and considerations described in the opinion, the aggregate 65 million newly-issued shares of New BlackRock common stock and non-voting series A convertible participating preferred stock to be issued by New BlackRock in exchange for Merrill Lynch’s contribution of the MLIM business pursuant to the transaction agreement was fair, from a financial point of view, to New BlackRock. The board of directors also considered the financial analyses performed by Citigroup in connection with its opinion. See “—Opinion of Citigroup.”

The board analyzed the foregoing potential strategic benefits and opportunities in the context of the risks presented by the transactions, including the risks described under “Risk Factors.” The board of directors

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considered uncertainties, risks and other potentially negative factors in its deliberations concerning the transactions, including, without limitation, the following:

The possibility that the transactions would not be completed and the risks to the business of BlackRock if that were to occur, including the loss of clients and employees;

The possible disruption of BlackRock’s business pending completion of the transactions, including the risk of losing clients and employees;

The increased exposure of the combined company to volatility in global financial markets, as described in “Risk Factors—MLIM’s various businesses may be adversely impacted by global market and economic conditions that may cause fluctuations in interest rates, exchange rates, equity and commodity prices and credit spreads;”

The risk that the potential benefits sought in the transaction will not be realized;

The substantial effort required to replace support functions currently provided by Merrill Lynch to MLIM, as described in “Risk Factors—The combination of the BlackRock business with the MLIM business creates numerous risks and uncertainties which could adversely affect our profitability;” and

The risks associated with the integration by BlackRock of the MLIM business and the challenges and difficulties of successfully combining the businesses of BlackRock and MLIM.

The board of directors concluded that the benefits of the transaction to BlackRock and its stockholders outweighed the risks associated with the foregoing factors.

The foregoing discussion is not intended to be exhaustive, but includes all material factors identified for the board of directors. The board, together with BlackRock management and our financial advisors, conducted numerous discussions of the factors described above, including asking questions of MLIM management and MLIM’s financial advisors. In view of the complexity and wide variety of factors considered in connection with the transactions, the board of directors did not consider it practicable to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the specific material factors considered by the directors in the course of the board reaching its decision. In addition, individual members of the board of directors may have given different weights to different factors considered by the board. The description in this section of our reasons for the transactions is in many respects forward-looking in nature and, therefore, should be read in light of the factors discussed under “Forward-Looking Statements.”

Based on its consideration of the foregoing factors, the board of directors has approved the transaction agreement, has determined that the transaction agreement and the transactions contemplated by it, including the merger, are advisable, fair to, and in the best interests of BlackRock and its stockholders, and that the issuance of New BlackRock capital stock to Merrill Lynch in consideration of the MLIM contribution is in the best interests of BlackRock and the holders of BlackRock common stock, and recommends that the BlackRock stockholders vote “FOR” Proposal 1, the adoption of the transaction agreement and approval of the merger, “FOR” Proposal 2, the approval of the issuance of capital stock to Merrill Lynch in consideration of the MLIM contribution and “FOR” each of Proposals 3-8, the adoption of provisions of the New BlackRock Certificate of Incorporation and By-Laws.

Merrill Lynch Investment Managers

MLIM currently is a business segment of Merrill Lynch. MLIM is among the world’s largest asset managers with approximately $583 billion of assets under management as of June 30, 2006.

With portfolio managers located in the United States, the United Kingdom, Japan and Australia, MLIM manages a wide array of taxable and tax-exempt fixed-income, equity and balanced mutual funds and segregated accounts for a diverse global clientele, as well as a wide assortment of index-based equity products and alternative investment products.

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MLIM’s clients include institutions, pension funds, high-net-worth individuals and retail investors. MLIM’s product distribution is managed through five channels: proprietary retail through Merrill Lynch’s Global Private Client (“GPC”) segment; Americas non-proprietary retail; Americas institutional; Europe, Middle East and Asia (“EMEA”) Pacific third-party retail; and EMEA Pacific institutional. MLIM also distributes certain of its products through Merrill Lynch’s Global Markets and Investment Banking (“GMI”) segment. MLIM maintains a significant sales and marketing presence both inside and outside the United States that is focused on acquiring and maintaining retail and institutional investment management relationships by marketing its services to retail and institutional investors both directly and through pension consultants, and establishing third-party distribution relationships.

MLIM offers a broad array of taxable and tax-exempt fixed-income, equity and balanced mutual funds and segregated accounts for a diverse global clientele, as well as a wide assortment of index-based equity and alternative investment products to its diverse client base of institutions, pension funds, high-net-worth individuals and retail investors around the world. In some cases, the same or similar products and services may be offered to both individual and institutional clients, utilizing the same infrastructure. In other cases, a single infrastructure may be used to support multiple products and services offered to clients. When MLIM analyzes its profitability, we do not focus on the profitability of a single product or service. Instead, it looks at the profitability of businesses offering an array of products and services to various types of clients. So the profitability of the products and services offered to pension funds, high-net-worth individuals and retail investors is analyzed separately from the profitability of products and services offered to institutions, regardless of whether there is commonality in products and services or infrastructure. As such, Merrill Lynch does not separately disclose the costs associated with the products and services sold or our general and administrative costs.

When pricing its various products and services, MLIM considers multiple factors, including prices being offered in the market for similar products and services, the competitiveness of its pricing compared to competitors, the profitability of its businesses and its overall profitability, as well as the profitability, creditworthiness, and importance of the overall client relationships.

Expenses incurred to support products and services and infrastructure shared by businesses are allocated to the businesses based on various methodologies which may include headcount, square footage, and certain other criteria. Similarly, certain revenues may be shared based upon agreed methodologies. When looking at the profitability of various businesses, Merrill Lynch considers all expenses incurred, including overhead and the costs of shared services, as all are considered integral to the operation of the businesses.

At the end of 2005, MLIM provided global advisory services for mutual funds, unit investment trusts and other non-U.S. equivalent retail products totaling approximately $245 billion. MLIM’s non-U.S. mutual fund ranges are based in a number of domiciles and cover a range of asset classes, including cash, fixed income and equities. The primary retail fund range offered outside the United States is Merrill Lynch International Investment Funds (“MLIIF”), which is authorized for distribution in more than 30 jurisdictions worldwide. In the United States, the primary retail offering is the Merrill Lynch family of funds. Additional fund offerings include structured products, real estate funds, hedge funds, hedge funds of funds, private equity funds of funds, managed futures funds and exchange funds. These products are sold to both U.S. and non-U.S. high-net-worth retail and institutional investors. At the end of 2005, assets under management included approximately $13.8 billion of client capital committed to, and approximately $10.6 billion invested in, alternative investment products.

MLIM manages separate accounts for high net worth retail investors as well as assets for governments, pension funds, endowments and other institutional investors in a wide variety of active and passive strategies covering both equity and fixed income assets. At the end of 2005, MLIM managed a total of approximately $44 billion in separate accounts and $250 billion in institutional accounts.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

In 2005, MLIM continued to focus on driving strong relative long-term investment performance and broadening the distribution of its products through multiple channels, while maintaining discipline on expenses. Current industry standards typically measure investment results for institutional accounts against a benchmark (such as the S&P 500 Index) and investment results for retail mutual funds against competitor results ranked by quartile within investment category as reported by third-party organizations, such as Lipper or Standard & Poor’s. More than 70% of MLIM’s global assets under management were above benchmark or category median for the three and five year periods ending December 2005.

In September 2005, MLIM acquired Philips Pensions Competence Center and Philips Investment Management, the internal investment management units of Royal Philips Electronics (“Philips”), adding approximately $18 billion to its assets under management as part of a strategic partnership with Philips in the Netherlands. The transaction represents a seven-year contract to manage the Philips pension fund.

MLIM’s Results of Operations

MLIM’s 2005 net revenues were $1.8 billion, up 14% from 2004, due primarily to higher average long-term asset values as well as increases in performance fees and an improvement in the fee profile of assets under management. Pre-tax earnings were $586 million, up 27% from 2004, driven principally by higher net revenues and continued expense discipline. MLIM’s pre-tax profit margin was 32.4% in 2005, up from 29.1% in 2004.

Pre-tax earnings for MLIM were $460 million in 2004, up 76% from 2003. Net revenues grew 16%, to $1.6 billion, due primarily to increased asset values related to market appreciation, as well as the positive impact of currency translation. As interest rates increased, investors moved assets out of retail money market funds to higher-yielding products, resulting in an increase in revenues. MLIM’s pre-tax profit margin was 29.1% in 2004, up from 19.2% in 2003.

Asset Management Fees

Asset management fees primarily consist of fees earned from the management and administration of retail mutual funds and separately managed accounts for retail investors, as well as institutional funds such as pension assets. Asset management fees also include performance fees, which are generated in some cases by separately managed accounts and institutional money management arrangements.

Asset management fees were $1.6 billion, up 11% from 2004 due to higher average equity market values and an improvement in the fee profile of assets under management. In 2004, asset management fees were $1.4 billion, up 15% from 2003 as average asset values increased and the fee profile of assets under management improved.

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MLIM’s assets under management for each of the last three years were comprised of the following:

At the end of 2005, MLIM’s assets under management totaled $539 billion. Compared with 2004, MLIM’s assets under management increased 9%, due principally to positive market movement, the addition of $18 billion of assets from the acquisition of Philips’ pension business and net new money inflows of $5 billion.

An analysis of changes in MLIM’s assets under management from year-end 2003 to 2005 is as follows:

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Commissions

Commissions for MLIM principally consist of distribution fees and contingent deferred sales charges (“CDSC”) related to mutual funds. The distribution fees represent revenues earned for promoting and distributing mutual funds, and the CDSC represents fees earned when a shareholder redeems shares prior to the required holding period. Commission revenues were $105 million in 2005, down 9% from 2004. Commission revenues declined to $116 million in 2004, down 12% from 2003. These reductions reflect the decline over time in sales of rear-load shares.

Other Revenues

Other revenues primarily include net interest income, investment gains and losses and revenues from consolidated investments. Other revenues totaled $129 million in 2005, up from $51 million in 2004 reflecting increased investment gains. Other revenues in 2003 were $(3) million. For the years 2005, 2004 and 2003 other revenues included net interest income of $27 million, $13 million and $6 million, respectively.

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Contractual Obligations

In the normal course of business, MLIM enters into various contractual obligations that may require future cash payments. The accompanying table summarizes MLIM’s contractual obligations by remaining maturity at December 30, 2005. See Note 7 to MLIM’S December 30, 2005 Combined Financial Statements for further information.

MLIM Risk Management

In the course of conducting its business operations, MLIM is exposed to a variety of risks that are inherent to the asset management business. MLIM, in the course of its ongoing business activities, invests proprietary capital in various structures.

The risks in the MLIM business are managed as part of Merrill Lynch’s overall risks. The risk management and control process ensures that Merrill Lynch’s risk tolerance is well-defined and understood by the firm’s businesses, including MLIM, as well as by its executive management. Other groups, including corporate audit, finance, and the office of general counsel, interact with Merrill Lynch’s global liquidity and risk management group (“GLRM”) to establish and maintain this overall risk management control process. While no risk management system can ever be perfect, the goal of these control groups is to make certain that risk-related losses occur within acceptable, predefined levels. A description of these risks and MLIM’s risk management related to them follows:

Market Risk

MLIM’s various businesses may be adversely impacted by global market and economic conditions that may cause fluctuations in interest rates, exchange rates, equity and commodity prices and credit spreads.

The financial services industry and the global financial markets are influenced by numerous unpredictable factors, including economic conditions, monetary and fiscal policies, the liquidity of global markets, availability and cost of capital, international and regional political events, acts of war or terrorism and investor sentiment. Changes in these factors may impact investment performance, which can affect MLIM’s profitability. MLIM manages this risk by employing qualified fund managers who monitor risks within the defined parameters of their respective funds.

In addition, MLIM is subject to non-trading market risk as a result of the risks associated with its investment securities. The primary market risk of investment securities is monitored by MLIM’s risk and quantitative analysis group, with oversight by GLRM’s market risk management group through the use of risk management methods and tools, including stress testing and event risk analysis, which examine portfolio behavior under significant adverse market conditions.

The following tables summarize the fair values of the investments exposed to equity price risk and provides a sensitivity analysis of the estimated fair values of those investments assuming a 10% increase or decrease in related financial markets.

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In addition, MLIM holds liquidity investments for regulatory purposes. These investments equaled $87 million and $133 million for 2005 and 2004, respectively.

Credit Risk

MLIM may incur losses from its credit exposure related to its business activities.

MLIM is exposed to the potential for credit-related losses that can occur as a result of an individual, counterparty or issuer being unable or unwilling to honor its contractual obligations. These exposures may arise, for example, from a decline in the financial condition of a counterparty and from extending credit to clients. An increase in MLIM’s credit exposure could have an adverse effect on its business and profitability if credit losses exceed credit provisions.

MLIM, in support of its private equity business, provides a warehousing facility that allows the portfolio managers to make investments in private equity funds after receiving capital commitments from investors in the funds but prior to the closing of the offering. As of December 2005, MLIM had an outstanding warehousing facility of up to $500 million for the ML Diversified Private Equity Program III (DivPeP III) offering, which is available for drawdown by MLIM against binding commitments of capital.

MLIM’s risk and quantitative analysis group assesses the creditworthiness of existing and potential individual clients, institutional counterparties and issuers, and determines firmwide credit risk levels within the credit risk framework, among other tools. The group reviews and monitors specific transactions as well as portfolio and other credit risk concentrations. The group is also responsible for ongoing monitoring of credit quality and limit compliance and actively works with MLIM to manage and mitigate credit risk.

Operational Risk

MLIM may incur losses arising from its exposure to operational risk. Financial services firms, including MLIM, are exposed to the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. Such operational risks may include, for example, exposure to natural or man-made

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disasters, mistakes made in the confirmation or settlement of transactions or from improper recording, evaluating or accounting for transactions. MLIM could suffer financial loss, disruption of its business, liability to clients, regulatory intervention or reputational damage, which would affect its business and financial condition.

MLIM and its support groups have processes and systems in place to address operational risks within their units. These include the use of technology to automate processes and key controls, the maintenance of business continuity plans to protect against major disruptions, and the establishment of control committees to ensure the ongoing effectiveness of controls.

MLIM, through Merrill Lynch, also employs independent control groups and governance committees to ensure effective management of operational risk. The operational risk management group is part of GLRM and is responsible for the monitoring and reporting of operational risk loss events, as well as putting in place the tools and techniques for the reporting and mitigation of operational risk exposure. In addition, this group is responsible for updating Merrill Lynch’s risk oversight committee (“ROC”) on the status of the operational risk program.

Merrill Lynch’s corporate audit, compliance and operations groups are key partners in the management of operational risk through independent reviews of controls, and ensuring effective compliance with applicable rules and regulations.

Litigation Risk

Legal proceedings could adversely affect MLIM’s operating results and financial condition for a particular period.

MLIM entities have been named as defendants in various legal actions, including arbitrations, class actions, and other litigation arising in connection with its activities.

MLIM may explore potential settlements before a case is taken through trial because of uncertainty and risks inherent in the litigation process. In accordance with SFAS No. 5, Accounting for Contingencies, MLIM will accrue a liability when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In many lawsuits, it is not possible to determine whether a liability has been incurred or to estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case no accrual is made until that time. In view of the inherent difficulty of predicting the outcome of such matters, particularly in cases in which claimants seek substantial or indeterminate damages, MLIM cannot predict what the eventual loss or range of loss related to such matters will be, which may be material to its operating results or cash flows for any particular period.

Regulatory and Legislative Risks

MLIM’s businesses are highly regulated and could be adversely impacted by regulatory and legislative initiatives around the world.

MLIM’s business may be adversely affected by regulatory and legislative initiatives imposed by various U.S. and non-U.S. regulatory and exchange authorities, and industry participants that continue to review and, in many cases, adopt changes to their established rules and policies.

Liquidity and Capital Resources

MLIM meets its liquidity needs primarily through cash generated by operating activities and by funding from Merrill Lynch treasury to the extent required. Liquidity risk relates to the ability of a company to repay short-term borrowings with new borrowings or assets that can be quickly converted into cash while meeting other obligations and continuing to operate as a going concern. MLIM liquidity is managed by Merrill Lynch, which

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seeks to assure liquidity across market cycles and through periods of financial stress. In order to ensure that both daily and strategic funding activities are appropriate and subject to senior management review and control, liquidity management is reviewed in asset/liability committee meetings with Merrill Lynch’s Treasury management and is presented to the ROC, Merrill Lynch executive management and the finance committee of Merrill Lynch’s board of directors.

After the transactions are completed, cash requirements will be funded principally through cash generated from operations. Further, BlackRock intends to seek a line of credit or other financing facility to meet certain cash flow requirements, such as warehousing investments or providing seed capital for new investments.

MLIM’s Results of Operations

N/M = Not Meaningful

MLIM’s second quarter 2006 net revenues were $630 million, up 56% from the 2005 second quarter. This increase was driven principally by net inflows and higher average long-term asset values. MLIM’s pre-tax earnings for the 2006 second quarter were $240 million, up 98% from the 2005 second quarter, and the pre-tax margin was 38.1% compared with 29.9% in the prior year period. The increase in pre-tax earnings and pre-tax margin can be attributed to strong operating leverage which was enhanced by net benefits related to the pending merger with BlackRock. These net benefits pertain to certain projects which have been curtailed and employee attrition not replaced in advance of the BlackRock transaction.

For the first six months of 2006, MLIM’s net revenues were up 47% over the first half of 2005, to $1.2 billion. Pre-tax earnings of $353 million and pre-tax margin of 29.4% included $109 million in one-time compensation expenses recognized during the first quarter of 2006. Excluding the one-time compensation expenses, the pre-tax earnings for the first half of 2006 were $462 million, up 86% from the year-ago period, and the pre-tax margin was 38.5%, up from 30.3% due primarily to strong operating leverage arising from expense discipline. Refer to Note 1 in the MLIM condensed combined financial statements for period ending June 30, 2006 and July 1, 2005.

A detailed discussion of MLIM’s revenues follows:

Asset Management Fees

Asset management fees were $522 million, up 42% from the second quarter of 2005 due to higher average equity market values, an improvement in the fee profile of assets under management and new money inflows. Year-to-date asset management fees were $1.0 billion, up 38% from the year ago period.

At the end of the second quarter of 2006, MLIM’s assets under management totaled $583 billion. Compared to the 2005 second quarter, MLIM’s assets under management increased 23%, due principally to positive market movement and net new money inflows.

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An analysis of changes in MLIM’s assets under management from July 1, 2005 to June 30, 2006 is as follows:

Commissions

Commissions revenues were $29 million in the second quarter of 2006, up 16% from the first quarter of 2005 on increased activity levels. Year-to-date commissions were $61 million, up 15% from the prior year period.

Other Revenues

Other revenues totaled $79 million for the second quarter of 2006, up from $13 million a year ago, reflecting increased investment gains associated with consolidated investments. Other revenues for the first six months of 2006 were $125 million, compared to $28 million for the first six months of 2005.

Other Quarterly Financial Data

At the end of the second quarter of 2006, MLIM provided global advisory services for mutual funds, unit investment trusts and other non-U.S. equivalent products totaling approximately $275 billion of assets managed. MLIM manages separate accounts for high-net-worth retail investors as well as assets for governments, pension funds, endowments and other institutional investors, in a wide variety of active and passive strategies covering both equity and fixed income assets. At the end of the second quarter of 2006, MLIM managed a total of approximately $42 billion in separate accounts and $266 billion in institutional accounts.

Contractual Obligations

In the normal course of business, MLIM enters into various contractual obligations that may require future cash payments. The accompanying table summarizes MLIM’s contractual obligations by remaining maturity at June 30, 2006.

Market Risk

The following table summarizes the fair values of the investments exposed to equity price risk and provides a sensitivity analysis of the estimated fair values of those investment assuming a 10% increase or decrease in related financial markets.