Wells Closing In on Deal to Buy Wachovia

Merger would create three banks with 30% of all deposits
By Jim O'Neill,  Newser User
Posted Sep 29, 2008 5:38 AM CDT
Wachovia Corp's CEO Robert Steel speaks during a news conference at the bank in Charlotte, N.C., earlier this year.   (AP Photo/Chuck Burton)
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(Newser) – Wells Fargo appeared to be close last night to forging a deal to buy struggling Wachovia, the nations's fourth-largest bank, reports the Wall Street Journal. Federal regulators pressured Wachovia to seek a suitor after its share prices plunged 47% last week. Citigroup was also in talks, but Wells now appears to be the preferred bidder, sources said.

A merger would give three top banks 30% of the nation’s deposits, concentrating power to set loan rates and accelerating the consolidation of the industry. The sale would place Wachovia's buyer along with Bank of America and JPMorgan Chase atop an increasingly diminishing heap of banking giants, forcing small and midsize banks to seek mergers in order to compete with the three leaders.