This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7650746.stm
The article has changed 3 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Wells Fargo to take over Wachovia | Wells Fargo to take over Wachovia |
| (about 1 hour later) | |
| The US bank Wells Fargo is to buy its troubled rival Wachovia in a $15.1bn (£8.5bn) deal, after Wachovia ditched a deal to buy Citigroup's assets. | |
| Wachovia had provisionally agreed a $2.16bn US government-backed rescue with Citigroup. | Wachovia had provisionally agreed a $2.16bn US government-backed rescue with Citigroup. |
| Wells Fargo's purchase of Wachovia will create one of the biggest US banks. | Wells Fargo's purchase of Wachovia will create one of the biggest US banks. |
| The deal comes amid a crisis that has seen investment bank Lehman Brothers go bust, and the failure of giant mortgage lender Washington Mutual. | The deal comes amid a crisis that has seen investment bank Lehman Brothers go bust, and the failure of giant mortgage lender Washington Mutual. |
| Before receiving the offer from Wells Fargo, Wachovia had been in talks with Citigroup to seal a deal overseen by the Federal Deposit Insurance Corporation (FDIC), that would include government help. | |
| Cassandra Toroian, chief investment officer at Bell Rock Capital added: "For Citigroup, this is a real loss...this was a deal that was going to save them as much as it was saving Wachovia." | |
| This deal enables us to keep Wachovia intact and preserve the value of an integrated company. Robert Steel Wachovia chief executive | This deal enables us to keep Wachovia intact and preserve the value of an integrated company. Robert Steel Wachovia chief executive |
| Deal approval | Deal approval |
| Wachovia's financial difficulties stemmed from its 2006 purchase of mortgage lender Golden West for $25bn at the height of the then US housing boom, according to analysts. | Wachovia's financial difficulties stemmed from its 2006 purchase of mortgage lender Golden West for $25bn at the height of the then US housing boom, according to analysts. |
| Wachovia's chief executive, Robert Steel, said: "Today's announcement creates one of the strongest financial firms in the world." | Wachovia's chief executive, Robert Steel, said: "Today's announcement creates one of the strongest financial firms in the world." |
| "This deal enables us to keep Wachovia intact and preserve the value of an integrated company," he said. | "This deal enables us to keep Wachovia intact and preserve the value of an integrated company," he said. |
| Shareholder questions | |
| Wells Fargo said it expected its earnings to benefit from the new agreement within a year, but some question the attraction of the deal for Wells' shareholders. | |
| Nancy Bush, analyst at Nab research said: "I think it's a more elegant solution for Wachovia shareholders." | |
| But she added: "If I were a Wells Fargo shareholder...I wouldn't be so happy. Wells is going to have to go to the capital markets at a time when it's not so easy to raise capital." | |
| The deal still has to be approved by shareholders. | The deal still has to be approved by shareholders. |