NEW YORK CITY — Wells Fargo & Co. has agreed to buy Wachovia Corp. for $15.1 billion, putting a wrench into a previously announced Citigroup deal.
The deal will include acquisition of all of Wachovia’s assets — banking assets, its brokerage business and its investment management business.
Wachovia’s board approved Wells Fargo’s offer Thursday night.
Citigroup’s deal would have included the purchase of Wachovia’s banking operations, not its other divisions.
“For Citigroup, this is a real loss,” says Cassandra Toroian, chief investment officer at Bell Rock Capital. “This was a deal that was going to save them as much as it was saving Wachovia.”
Wells Fargo has been one of the few major banks who has remained profitable through the credit crisis, while Citigroup has posted more than $17 billion in losses in 2008.
Wachovia shareholders will receive 0.1991 shares of Wells Fargo stock in exchange for each share of Wachovia stock.
“This deal enables us to keep Wachovia intact and preserve the value of an integrated company, without government support,” said Robert Steel, chief executive officer with Wachovia, in a prepared statement. “The market presence and composition of our businesses, along with our service-oriented cultures, are extraordinarily complementary and this combination creates great potential for sustained stability and growth.”