Wells Fargo To Buy Wachovia

We've been following the financial crisis news all week regarding the Wall Street bailout. Now it seem, according to the New York Times, Wells Fargo is going to buy Wachovia.

In a stunning reversal, the Wachovia Corporation said early Friday that it planned to be acquired by a rival bank, Wells Fargo & Company, for about $15.1 billion in stock.

The announcement came four days after Citigroup believed that it had cemented a deal with Wachovia to buy most of its banking operations for $1 a share or $2.2 billion in a deal brokered by federal regulators. With Wachovia on the brink of collapse, the government agreed to cover any losses above $42 billion, an indication of the urgency of regulators to get a deal done.

But Wachovia has now apparently rejected the Citigroup deal in favor of Wells Fargo. That deal calls for Wells Fargo to buy all of Wachovia for $7 a share and requires no assistance from the federal government. Wachovia customer deposits would be protected in both deals.

Still, the agreement requires the approval of Wachovia shareholders and regulators. In an announcement Friday, the Federal Deposit Insurance Corporation, which brokered the Citigroup-Wachovia deal, said that it “stands behind its previously announced agreement with Citigroup.”

It's never a dull moment in business these days!