CHARLOTTE, N.C. – Wachovia Corp. (NYSE: WB) has agreed to buy St. Louis-based A.G. Edwards Inc. (NYSE: AGE), the 120-year-old securities firm, for $6.8 billion.
The purchase will double Wachovia’s sales staff as regional brokers struggle to remain independent amid declining revenue from trading stocks.
The biggest purchase of a U.S. brokerage firm in almost seven years, it will pay A.G. Edwards shareholders $89.50 per share in cash and stock, or 16 percent more than yesterday’s closing price, Wachovia said.
The takeover will create the second-largest U.S. brokerage firm after Merrill Lynch & Co., with almost 14,800 financial advisers, according to Bloomberg News.
A.G. Edwards – founded by a friend of former President Abraham Lincoln – has fallen behind in the competition for stock trades as investors turn to Goldman Sachs Group Inc., UBS AG, Merrill and Morgan Stanley, which offer better prices.
“We knew we needed scale, we knew we needed additional products as financial services continue to migrate toward a global platform,” A.G. Edwards CEO Robert Bagby said on a conference call.
The acquisition will be the fifth largest in Wachovia’s history and the biggest for a U.S. brokerage since Zurich-based UBS bought New York-based Paine Webber Group Inc. in November 2000, according to data compiled by Bloomberg.
Additional information is available at www.agedwards.com.
