Wells Fargo agrees to buy Wachovia for $15.1 bn

Font Size

Print

Feedback

Email

Discuss

Related Articles

Green energy attracts global players'Millionaires to rise in India despite slowdown'3 banks raise non-resident deposit ratesCentre sends out 11.5% rate signal

Wells Fargo & Co, the biggest US bank on the West Coast, agreed to buy all of Wachovia Corp for about $15.1 billion in stock, trumping Citigroup Inc’s offer four days ago for part of the embattled North Carolina lender. The deal values Charlotte-based Wachovia, led by chief executive officer Robert K Steel, at $7 a share, the companies said in a joint statement on Friday. Wachovia traded at $6.52 before the official open on the New York Stock Exchange, up 67% from Thursday. Wells Fargo rose 4.9% to $36.90.

Wells Fargo said its offer keeps Wachovia intact and needs no US assistance, unlike Citigroup’s offer, which relied on financial backing from the Federal Deposit Insurance Corp. Citigroup, the biggest US bank by assets at midyear, said on September 29 that it planned to buy Wachovia’s banking businesses for about $2.16 billion, leaving behind the AG Edwards Inc brokerage and the Evergreen mutual-fund family.

“It provides superior value compared to the previous offer to acquire only the banking operations of the company,” Richard Kovacevich, chairman of San Francisco-based Wells Fargo, said in the statement. “Wachovia shareholders will have a meaningful opportunity to participate in the growth and success of a combined Wachovia-Wells Fargo that will be one of the world’s great financial services companies.” Wachovia shareholders get 0.1991 shares of Wells Fargo common stock for each share they own. Wells Fargo expects charges related to the acquisition of about $10 billion, and the company said it will issue as much as $20 billion of new securities, mostly common stock.

—Bloomberg

Citi wants deal terminated