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Fed Approves Wells Fargo's Wachovia Buy

Posted on: Monday, 13 October 2008, 09:15 CDT

The Associated Press

WASHINGTON

The Federal Reserve on Sunday approved Wells Fargo's $11.7 billion acquisition of North Carolina-based Wachovia, removing the deal's last major regulatory hurdle.

The Fed's move comes after federal antitrust regulators also moved swiftly to back San Francisco-based Wells Fargo's deal to buy the Charlotte, N.C.-based bank, approving it on Friday.

Citigroup Inc. on Thursday walked away from its own efforts to buy Wachovia - which was hit by a $5 billion run on deposits in late September after the failure of Washington Mutual Inc., according to court documents filed by Citigroup.

In a brief statement Sunday, the Fed said it approved Wells Fargo taking on Wachovia Corp. along with all its banking and other units.

Citigroup initially agreed to buy Wachovia's banking operations for $2.1 billion in a deal brokered by the Federal Deposit Insurance Corp. But four days later, Wells Fargo announced that Wachovia's board had agreed to an $11.7 billion all-stock offer.

Originally, the deal was valued at $15.1 billion, or $7 a share, but Wells Fargo stock has declined since it was announced.

While Citigroup has announced plans to seek $60 billion in damages for breach of contract, it has decided not to challenge the Wells Fargo- Wachovia deal in court.

what's next

Wells Fargo & Co. has said it plans to complete the deal by the end of the fourth quarter. The deal still needs an OK from Wachovia shareholders.

Image Courtesy Wikipedia

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Source: Virginian - Pilot

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