By Lisa Kerner
Charlotte, N.C., May 31 - Wachovia Corp. will acquire A.G. Edwards Inc. and combine the company with Wachovia Securities, LLC to create a retail brokerage firm with $1.1 trillion in client assets and nearly 15,000 financial advisers, according to a company news release.
Under the terms of the companies' agreement, A.G. Edwards' shareholders will receive 0.9844 of a share of Wachovia common stock and $35.80 in cash, for a total value of about $89.50 per A.G. Edwards share. The agreement includes a $270 million break-up fee payable to Wachovia in certain circumstances.
Based in St. Louis, the combined retail brokerage organization will be led by Wachovia Securities president and chief executive officer Daniel J. Ludeman. Robert L. Bagby, chairman and chief executive officer of A.G. Edwards, will be chairman of the combined brokerage firm.
"The long-term growth opportunities of the brokerage industry are extremely compelling to Wachovia, and we have long expressed our interest in growing this business both organically and through acquisition," Wachovia chairman and chief executive officer Ken Thompson said in the release.
Credit Suisse Securities (USA) LLC, Wachovia Securities and Simpson Thacher & Bartlett LLP represented Wachovia, and Goldman, Sachs & Co. and Wachtell, Lipton, Rosen & Katz represented A.G. Edwards.
Wachovia is a diversified financial services company based in Charlotte, N.C.
A.G. Edwards is a financial services holding company located in St. Louis.
| Acquirer: | Wachovia Corp.
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| Target: | A.G. Edwards Inc.
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| Price per share: | 0.9844 of a Wachovia share and $35.80 in cash, for a total value of about $89.50
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| Announcement date: | May 30
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| Break-up fee: | $270 million
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| Expected closing: | Upon approvals
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| Stock price for acquirer: | NYSE: WB: $54.55 on May 30
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| Stock price for target: | NYSE: AGE: $77.15 on May 30
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