Wachovia will buy A.G. Edwards for $6.8 billion, forming the nation's number two retail brokerage. Wachovia's $89.50 per share offer for the historic Midwest brokerage—it survived the crash of '29—helps the bank further expand its growing securities arm. The combined company will manage over $1 trillion, second to Merrill Lynch and ahead of Smith Barney.
Wachovia has been on an acquisition binge, buying First Union, Prudential Securities, and Golden West Financial in an attempt to grab small investors, especially the boomers looking to stash their retirement nest eggs. But investors aren't so sure it's the right deal at the right time: Shares of the bank fell on the news.