Wells Fargo Acquires Wachovia in $15 Billion Merger
Another major development in the capital markets today leading towards what we can only hope will be a more stable enviroment ahead...
Wells Fargo & Co. and Wachovia Corp. agreed to a $15 billion merger that highlights the buyer's strong balance sheet and aspirations to expand its presence in the eastern U.S.
San Francisco-based Wells Fargo, one of the nation's largest commercial mortgage lenders, has mostly avoided the crushing impact of the collapsing real-estate market and subsequent credit crisis by eschewing some of the riskiest lending practices that wrecked rivals and other financial-services firms.
Wells Fargo said it will take $10 billion in charges to put Wachovia's troubled assets on its own balance sheet at fair value, while issuing up to $20 billion of securities, primarily in the form of equity, to beef up its balance sheet.
Wachovia said its board approved Wells Fargo's offer Thursday night.
"This deal enables us to keep Wachovia intact and preserve the value of an integrated company, without government support," said Wachovia CEO Robert Steel.
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