Wells Fargo to acquire Wachovia for $15.1 billion

Wells Fargo, the largest bank on the West Coast, agreed to buy Wachovia Corp. for $15.1 billion in stock, creating one of the worldÔÇÖs biggest banks and defeating Citigroup Inc.ÔÇÖs offer four days ago for part of the lenderÔÇÖs assets. ┬á Citigroup, the biggest bank in terms of assets by mid-year said late last month that it planned to buy WachoviaÔÇÖs operations for about $2.16 billion. The transaction had been supervised by the Federal Deposit Insurance Corp. and assisted by the government. The deal was supposed to further CitigroupÔÇÖs US deposit base while boosting Wachovia, a bank that looked more and more troubled after Lehman Brothers went backrupt last month. ┬á Wells Fargo is to acquire all of WachoviaÔÇÖs businesses, preferred equity, and banking deposits. The San Francisco-based bank suggested the acquisition will add to earnings per share, as well as provide an increase in its internal rate of return. ┬á The Wachovia purchase will see Wells Fargo responsible for $1.42 trillion in assets, $787 billion in deposits, 10,761 branches, and about $122 billion in option ARMs sold by Wachovia, the number one provider of such loans.┬á While the Wells Fargo deal was seen as a loss and disappointment for Citigroup, the purchase offers a bright outlook for Wachovia. ÔÇ£This deal enables us to keep Wachovia intact and preserve the value of an integrated company, without government support,ÔÇØ said Wachovia President and Chief Executive Robert Steel.┬á Wells Fargo chairman, Richard Kovacevich, said in a statement, ÔÇ£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 worldÔÇÖs great financial service companies.ÔÇØ ┬á┬á WachoviaÔÇÖs board approved the WellÔÇÖs Fargo deal Thursday night.