Wells Fargo To Buy Wachovia With Out FDIC Help

I saw this story this morning I have my bank accounts with Wachovia so needless to say I have been keeping an eye on what happens with them. This story in and of itself makes me think that just MAYBE we don't need the government to put their hands into everything we don't need them to come in and save the economy . The first deal of Citi to over take Wachovia included the FDIC's help in that Citi wanted the FDIC to take on some of Wachovia's massive outstanding debt. The new deal between Wells Fargo WILL NOT COST THE FDIC OR THE GOVERNMENT A DIME! And thats how it should be I say kudos to Wells Fargo for stepping in and saving the day with out the FDIC's help.

Of course Wells maybe thinking that this bail out bill will pass and they will be able to pass off some of the massive debt they have picked up I don't know. We will see how things pan out

Credit Foxnews:

Wells Fargo one-upped Citigroup on Friday by unveiling a $15.1 billion deal to acquire all of Wachovia.

The Wells Fargo offer (WFC: 35.16, -1.54, -4.19%) supersedes Citigroup’s (C: 22.50, -0.50, -2.17%) offer to acquire Wachovia’s (WB: 3.91, +0.36, +10.14%) banking operations with help from the government.

If approved by regulators and Wachovia shareholders, the all-stock deal will give Wachovia shareholders 0.1991 shares of Wells Fargo common stock in exchange for each share of Wachovia.

Wells Fargo said it will acquire all of Wachovia’s businesses and obligations, including its preferred equity, indebtedness and banking deposits. Boards of both Wells Fargo and Wachovia signed off on the deal.

Wells Fargo, which has managed the credit crisis better than many of its rivals, said it expects to incur $10 billion in merger and integration charges from the deal.

To help pay for the deal, Wells Fargo said it plans to raise $20 billion in a common stock offering.

“We at Wachovia have great admiration and respect for the people and businesses at Wells Fargo and we are extremely pleased to join forces with this outstanding company,” Robert K. Steel, president and CEO of Wachovia, said in a statement.

The Wells Fargo offer is a big setback for Citi, which had agreed to swallow Wachovia’s banking operations in a government-assisted deal worth $2.1 billion of Citi stock.

At the time, the Federal Deposit Insurance Corp. said Wachovia “did not fail.” The FDIC said its assistance was needed to avoid serious adverse effects no the economy and came after consultation with President Bush and Treasury Secretary Henry Paulson.

Citi’s shares had soared since it announced its bid as the combined banking operations would have created a U.S. retail bank with $1.3 trillion in deposits or 9.8% of the U.S. market.

It was a sweetheart deal for Citi as the government agreed to share in losses on Wachovia’s loans. At the same time, Citi announced a $10 billion common share capital raise and plans to slash its dividend to 16 cents.

Prior to Citi’s rescue of Wachovia on Monday, reports swirled that Wells Fargo was very much in the hunt to acquire Wachovia.

“This agreement represents a compelling value for Wachovia shareholders,” said Wells Fargo Chairman Dick Kovacevich. “It provides superior value compared to the previous offer to acquire only the banking operations of the company and because Wachovia shareholders will have a meaningful opportunity to participate in the growth and success of a combined Wachovia-Wells Fargo that will be one of the world’s great financial services companies.”

Kovacevich added, “And, of course, this agreement won’t require even a penny from the FDIC.”

Wells Fargo said Wachovia Securities will keep its headquarters in St. Louis, Missouri. Also, three members of Wachovia’s board will join Wells Fargo’s board.

The Wachovia-Wells Fargo merger comes after a month of extreme turbulence on Wall Street that saw the demise of countless banks and shot-gun marriages of almost as many.

Amid a worsened credit crisis, the government allowed Lehman Brothers (LEH) to file for bankruptcy, gave an emergency $85 billion loan to insurer American International Group (AIG: 4.00, +0.05, +1.26%) and nationalized mortgage giants Fannie Mae (FNM: 1.56, -0.10, -6.02%) and Freddie Mac (FRE: 1.80, -0.09, -4.76%).

At the same time, Merrill Lynch (MER: 27.40, +0.70, +2.62%) sold itself to Bank of America (BAC: 36.37, -1.76, -4.61%) and JPMorgan Chase (JPM: 49.85, +0.60, +1.21%) acquired the deposits of Washington Mutual (WM: 0.16, +0.00, +0.00%) after the savings-and-loan became the nation’s largest banking failure ever.