Wells Fargo & Co. will acquire Wachovia Corp. in a $15.1 billion merger, blocking an earlier bid by Citigroup Inc.
Unlike the proposed Citigroup deal, the Wells Fargo takeover will not include government assistance and encompasses all Wachovia operations. Citigroup had required FDIC backing and sought bank operations only, excluding Wachovia’s brokerage and asset-management divisions.
The boards of Wachovia and Wells Fargo have approved the offer, which will give Wachovia shareholders 0.1991 share of Wells Fargo stock for each Wachovia share.
Wells Fargo had pursued Wachovia before the Citigroup acquisition had been announced. But last weekend, the company suddenly backed out, sparking the frenetic negotiations that had led to the Citigroup-FDIC arrangement. Wells Fargo then reversed its position again and aggressively pursued the latest deal.
“This agreement is an outstanding opportunity for Wachovia common and preferred shareholders and debt holders, team members and customers, for the Charlotte and St. Louis communities and indeed all of the communities that Wachovia serves, and for the U.S. government and our banking system,” Wells Fargo Chairman Richard Kovacevich said in a statement.
Wells Fargo is considered to be one of the more robust financial institutions in the industry. Warren Buffett’s Berkshire Hathaway is a major investor. But as The New York Times’ Dealbook notes today, the company has not been a major player east of the Mississippi.
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