NEW YORK – The Federal Reserve on Sunday approved Wells Fargo's $11.7 billion acquisition of North Carolina-based Wachovia, removing the deal's last major regulatory hurdle.
The Fed's move comes after federal antitrust regulators also moved swiftly to back San Francisco-based Wells Fargo's deal to buy the Charlotte, N.C.-based bank, approving it on Friday.
Citigroup Inc. on Thursday walked away from its own efforts to buy Wachovia — which was hit by a $5 billion run on deposits in late September after the failure of Washington Mutual Inc., according to court documents filed by Citigroup.
In a brief statement Sunday, the Fed said it approved Wells Fargo taking on Wachovia Corp. along with all its banking and other units. The Federal Trade Commission included the deal on a list of transactions released Friday that received an "early termination" of their antitrust reviews.
Wells Fargo & Co. has said it plans to complete the deal by the end of the fourth quarter. The acquisition still needs the approval of Wachovia shareholders.
Citigroup initially agreed to buy Wachovia's banking operations for $2.1 billion in a deal brokered by the Federal Deposit Insurance Corp. But four days later, Wells Fargo announced that Wachovia's board had agreed to an $11.7 billion all-stock offer. Originally, the deal was valued at $15.1 billion, or $7 a share, but Wells Fargo stock has declined since it was announced.
While Citigroup plans to seek $60 billion in damages for breach of contract, it has decided not to challenge the Wells Fargo-Wachovia deal in court.