Wachovia acquires A G Edwards for $6.8bn

1 June 2007

U.S bank Wachovia is to buy A.G Edwards for around $6.8 billion, it has been announced.

The deal will result in the second-largest retail brokerage firm in the US with $1.1 trillion in client assets and 15,000 financial advisers.

Under the terms of the acquisition, shareholders in A.G Edwards will receive $35.80 in cash and 0.9844 shares of Wachovia stock for each A.G Edwards share.

It is expected that after the deal is finalized in the fourth quarter of this year, synergies will lead to expense savings of $395 million by 2009 - equivalent to ten per cent of Wachovia's annual expense in 2006.

Some of the savings are anticipated to result from closing offices and job cuts.

However, one-off administration charges related to the merger are estimated at $680 million. The combined company will be named Wachovia Securities and will be headquartered in St Louis.

Daviel Ludeman of Wachovia will retain his position as chief executive and president, while Robert Bagby, A.G Edwards chief executive officer and chairman, will be installed as chairman.

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