The securities industry will have to make room for another behemoth once Wachovia Securities teams up with A.G. Edwards Inc. to become the second-largest retail brokerage in the U.S, Business Week reports.
Charlotte-based financial services giant Wachovia Corp., whose Wachovia Securities unit is the fourth largest retail broker, is buying St. Louis-based A.G. Edwards, the sixth-largest player, for about $6.8 billion. A.G. Edwards’ shareholders will receive 0.9844 shares of Wachovia common stock plus $35.80 in cash for each of their A.G. Edwards shares.
The deal is valued at $89.50 per share, a 16 percent premium to A.G. Edwards’ $77.15 closing price on Wednesday. A.G. Edwards’ shares were up 13.7 percent at $87.73 in NYSE trading May 31. Wachovia was down 0.7 percent at $54.18.