The federal government is close to committing billions of additional aid to Bank of America Corp. as it tries to digest its Jan. 1 acquisition of Merrill Lynch & Co. Inc., people familiar with the situation said Wednesday.

The discussion began in mid-December, when B of A told the Treasury Department it was unlikely to complete the purchase, because of Merrill's larger-than-expected losses in the fourth quarter, according to a person familiar with the talks.

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