Wells Fargo and Wachovia have decided to merge their companies. The deal values Wachovia at $15 billion and at a price of $7 per share. Wells Fargo said it would pay 0.1991 shares of Wells Fargo common stock in exchange for each share of Wachovia common stock. The board of Wachovia has approved of this offer.
With this deal, Wachovia has abandoned its negotiations with Citigroup to complete a transaction supervised by the FDIC that included assistance from the government. Wachovia's Board approved Wells Fargo's offer last night. Interestingly, Warren Buffet owns a 9% stake in Wells Fargo. The transaction, based on Wells Fargo's closing stock price of $35.16 on Thursday, is valued at $7 per Wachovia share.
"We at Wachovia have great admiration and respect for the people and businesses at Wells Fargo and we are extremely pleased to join forces with this outstanding company," said Robert K. Steel, President and CEO of Wachovia Corp in a release. "This deal enables us to keep Wachovia intact and preserve the value of an integrated company, without government support," he added.