Wells Fargo Officially Takesover Wachovia Amid Deepening Financial Crisis

January 1, 2009 5:44 a.m. EST

New York, NY (AHN) - Wells Fargo & Co. (NYSE:WFC) has officially taken over Wachovia Corp. for a price of $12.7 billion as the financial services sector awaits the economy to hit bottom and get over with the worst recession since the Great Depression.

"This merger creates what we believe will be a very compelling value proposition for our team members, customers, communities and shareholders with significant potential for even more market share growth," said Wells Fargo President and CEO John Stumpf.

"We're being very thoughtful and deliberate in our three-year merger integration. Just as we did with the very successful Norwest-Wells Fargo merger integration a decade ago, we'll take the time to do it right for our customers, always putting their interests first by seeking to satisfy all their financial needs and helping them succeed financially."

With completion of its merger, the companies created financial-services giant in North America with $1.4 trillion in assets, 11,000 stores and 12,260 ATMs across covering 48 million banking homes in 39 states and the District of Columbia.

The combination will also lead to the creation of the country's second-largest bank by deposits and the top coast-to-coast branch network with more than 6,600 offices, with services including small business lending, middle market commercial banking, agriculture lending, commercial real estate lending, commercial real estate brokerage, and bank-owned insurance brokerage.

At closing, Wells Fargo acquired all outstanding shares of common stock of Wachovia in a stock-for-stock transaction, the company said in a statement on early Thursday.

Wachovia shareholders received 0.1991 shares of Wells Fargo common stock in exchange for each share of Wachovia common stock they owned.

The company added that with the completion of the transaction, Wells Fargo acquired all of Wachovia Corporation and its businesses and obligations, including all of its banking deposits.

Shares of Wells Fargo increased and closed higher 68 cents to $29.48 on Wednesday in composite trading on the New York Stock Exchange. Wells Fargo's stock dropped only by 2.4 percent in 2008, which is less compared to its rival firms in the financial services sector.

Wachovia's stock symbol "WB" was retired effective December 31, 2008, and it will now trade under Wells Fargo's stock symbol of WFC, the statement said.

Wells Fargo Bank has the highest possible credit rating of "Aaa" from Moody's Investors Service and the highest credit rating of U.S. bank "AA+" from Standard & Poor's Ratings Services.