Report: First Union to buy Wachovia in $13 billion stock deal

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NEW YORK (AP) - First Union Corp., the nation's sixth largest bank, is reportedly set to buy Wachovia Corp. for about $13 billion in stock in a move that would unite two North Carolina banking rivals.

Both boards have approved the transaction, and an announcement is expected Monday, unidentified sources told The Wall Street Journal in Monday's editions.

The deal would make the First Union the nation's fourth largest bank _ behind Citigroup Inc., Bank of America Corp. and J.P. Morgan & Chase Co. _ with about $331 billion in assets.

First Union is offering about two of its shares for each share of Wachovia, which would value Wachovia at about $63.84 a share _ a premium of only 6 percent, the Journal said.

Wachovia shareholders will own about 27 percent of the combined company and receive a special one-time dividend of about 48 cents a share because First Union recently slashed its dividend.

First Union has about 2,100 bank branches in 11 eastern states and Washington, D.C. Wachovia has more than 650 offices, primarily in Florida, Georgia, North Carolina, South Carolina and Virginia.

L.M. "Bud" Baker Jr., Wachovia's chairman and chief executive, will be chairman of the combined company, which will have the Wachovia name but be based in First Union's hometown of Charlotte. Currently, Wachovia has dual headquarters in Winston-Salem, N.C., and Atlanta.

First Union's chief, G. Kennedy Thompson, will be president and CEO of the combined entity. Each side would get nine board seats.

The reported deal comes only days after Bank One Corp. agreed to purchase Wachovia's $8 billion consumer credit card portfolio for undisclosed terms.

Both First Union and Wachovia declined to comment.

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