First Union Corporation of Charlotte, N.C. and Wachovia Corporation of Winston-Salem, N.C. announced last week that they have agreed to merge. The combined company, which will provide corporate banking, retail banking, asset and wealth management, capital markets and securities brokerage services and products, will have $222 billion in assets under management, including mutual fund assets of $96 billion, according to the companies. The combined company will be known as Wachovia Corporation. Its headquarters will be in Charlotte.
Wachovia shareholders will receive two shares of First Union stock for each share of Wachovia stock. In addition, Wachovia's board is expected to approve a 48 cents per share dividend prior to closing. The closing is expected to occur in the third quarter.
L.M. Baker Jr., chairman, president and CEO of Wachovia, will become chairman of the new entity. G. Kennedy Thompson, chairman, president and CEO of First Union, will become president and CEO of the new company. The board of directors of the new company will be equally divided, with nine directors coming from First Union and nine from Wachovia. The companies said they planned to place greater emphasis in the future on asset and wealth management, including on mutual funds and annuities.