Wells Fargo and Company (WFC)

[MrBankRoll]

Wells Fargo, Wachovia shareholders approve deal
Dec. 23, 2008 01:03 PM
The Associated Press
NEW YORK - Wells Fargo & Co. and Wachovia Corp. shareholders on Tuesday voted to approve Wells Fargo's $11.8 billion purchase of Wachovia.

The combination creates one of the nation's largest banks. A combined Wells Fargo and Wachovia will have more than $1.42 trillion in assets and nearly $800 million in deposits, with operations in 39 states and Washington, D.C.

Shareholder approval of the Wachovia and Wells Fargo deal was the second major banking combination vote Tuesday. Earlier in the day, shareholders of PNC Financial Services Group Inc. and National City Corp. agreed to Pittsburgh-based PNC's acquisition of Cleveland-based National City.

Charlotte, N.C.-based Wachovia was ultimately sold in October after a bitter battle between two of the country's largest banks, as Citigroup Inc. and San Francisco-based Wells Fargo fought for its strong deposit base. Eventually Citigroup walked away from the deal after it and Wells Fargo failed to reach a deal to split up Wachovia.

Amid the ongoing credit crisis, banks have been looking for large, stable funding options such as deposits as credit markets have all but dried up.

Wachovia had been struggling for some time amid a sharp rise in mortgage defaults, and had been eyed as a possible takeover target. The rush to a deal was prompted by a $5 billion run on deposits at Wachovia in late September that threatened the future of the bank, according to court documents.

New York-based Citigroup agreed to step in and buy Wachovia's banking operations for $2.1 billion with the help of the Federal Deposit Insurance Corp. But only four days later, Wells Fargo made a higher offer that did not hinge on any government support and ultimately won the right to purchase Wachovia.

Originally, the deal with Wells Fargo was valued at $15.1 billion, or $7 a share. Wachovia shareholders will receive 0.1991 shares of Wells Fargo common stock for each share of Wachovia they own. Based on Monday's closing for Wells Fargo, shares of Wachovia are valued at about $5.46.

The deal is expected to close before the end of the year. Wells Fargo expects the integration process of the two banks to take between two and three years.

Shares of Wells Fargo fell 18 cents to $27.24 in afternoon trading.

Wachovia shares fell 9 cents to $5.36.