Wells Fargo to buy Wachovia for $15.1 billion
Wells Fargo said Friday that it would merge with Wachovia - including the troubled Charlotte bank's banking operations - in a $15.1 billion all-stock merger.
The announcement comes only four days after Citigroup agreed to buy Wachovia's retail banking operations for about $1 a share, at the government's behest and with a guarantee to absorb most of the losses on Wachovia's massive loan portfolio. That deal, which Wachovia now appears to be spurning, would have left the Charlotte bank with only its securities and retail brokerage businesses.
Wells Fargo, based in San Francisco and considered one of the strongest banks amid the market turmoil, said that the deal requires no assistance from the Federal Deposit Insurance Corporation or any other government agency. It will raise up to $20 billion by issuing new shares, primarily common stock.
Wells Fargo had expressed interest in buying Wachovia as late as Sunday, but suddenly withdrew from negotiations to buy the company, citing concerns over some of the bank's loan portfolio. Citigroup then received the blessing of the FDIC to acquire Wachovia's banking operations
Source: International Herald Tribune
Date: 05.10.2008 [ID: 196]