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Wachovia deal closes
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September 4, 2001: 8:56 a.m. ET
First Union's $14B purchase of Wachovia creates No. 4 bank, pays small premium
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NEW YORK (CNNfn) - North Carolina banks First Union Corp. and Wachovia Corp. completed their controversial merger Tuesday, creating the nation's fourth largest bank holding company.
The stock swap deal is worth about $14 billion based on Friday's market close, but paid little premium to Wachovia shareholders. The offer prompted a rival offer from SunTrust Banks Inc. (STI: Research, Estimates) , which launched legal action and a hostile offer, relatively rare in the world of banking, before dropping its effort.
Wachovia shareholders receive two shares of First Union stock for each of their shares, in addition to a special dividend of 48 cents a share.
The new combined company, which will use the Wachovia (WB: Research, Estimates) name and stock symbol, will have assets of about $322 billion. First Union had been the nation's No. 6 bank ranked by assets. It had grown rapidly through acquisitions, but has slowed the pace of purchases in recent years as it struggled to integrate some past purchases.
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The purchase moves the combined bank past Bank One Corp. (ONE: Research, Estimates) and Wells Fargo & Co. (WFC: Research, Estimates) on the list of the nation's largest banks, leaving it behind only Citigroup (C: Research, Estimates), JP Morgan Chase & Co. (JPM: Research, Estimates) and Bank of America Corp. (BAC: Research, Estimates) 
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