Wells Fargo said early Friday that it would merge with Wachovia -- including the troubled Charlotte bank's banking operations -- in a $15.1 billion all-stock merger.
The announcement comes only four days after Citigroup agreed to buy Wachovia's retail banking operations for about $1 a share, at the government's behest and with its help. That deal would have left Wachovia with only its securities and retail brokerage.
Wells Fargo, based in San Francisco and considered one of the strongest banks amid the market turmoil, said that the deal requires no assistance from the Federal Deposit Insurance Corporation or any other government agency. It will raise up to $20 billion by issuing new shares, primarily common stock.
"Today's announcement creates one of the strongest financial firms in the world and is great for all Wachovia constituencies: our shareholders, customers, colleagues and communities," Robert K. Steel, Wachovia's chief executive, said in a statement. "This deal enables us to keep Wachovia intact and preserve the value of an integrated company, without government support."
Under the terms of the deal, Wachovia shareholders will receive .1991 shares of Wells Fargo common stock. Based on Wells Fargo's Thursday closing price of $35.16 a share, that amounts to $7 a share.
Wells Fargo said that it would incur $10 billion in merger costs.