Wachovia Corp. is acquiring Golden West Financial Corp., gaining mortgage lending operations under the World Savings Bank name in 39 states, Wachovia said Sunday.
The acquisition will strengthen Wachovia’s presence in California, Florida and Texas, and extends the banking franchise within reach of 55 percent of the U.S. population, the company said.
With the acquisition of Oakland, Calif.-based Golden West, Wachovia will add 285 consumer banking offices with $62 billion in retail deposits in 10 states while entering new markets in California, Arizona, Colorado, Illinois, Kansas and Nevada, the company said. The combined company will have assets of $669 billion and a market capitalization of $117 billion.
“For four decades, Golden West has taken industry-wide challenges in stride and maintained a singular focus as a risk-averse residential mortgage portfolio lender. The result is a … 25-year track record of 17 percent compound annual growth in earnings per share and virtually no credit losses realized even in the toughest year in its history,” said Ken Thompson, Wachovia chairman and chief executive officer.
Thompson said, “We believe this combination of our two companies, both known for exceptional customer service and pristine credit quality, will generate superior long-term growth in earnings per share.”
Terms of the agreement call for each Golden West shareholder to receive a package of 1.051 shares of Wachovia common stock and $18.65 in cash, the company said. Based on the closing price of Wachovia common stock on May 5, 2006, this represents total consideration of $25.5 billion, or a price of $81.07 per share of Golden West common stock, the company said.
The combined company will have total deposits of $390 billion and loans of $402 billion. More than 110,000 employees, 3,400 banking branches, 5,300 ATMs, 360 mortgage lending offices and 730 full-service retail brokerage offices will serve the company’s 15 million customers, the company said.