| |
WASHINGTON: A US appeals court has struck down an earlier injunction order on a proposed merger between banks Wells Fargo & Co and Wachovia, Wells Fargo announced in a statement late Sunday.
"The appellate court has entered an order vacating Judge Ramos's order of yesterday. We are pleased that the unfounded order entered yesterday has been vacated," the statement said.
"Wells Fargo will continue working toward the completion of its firm, binding merger agreement with Wachovia Corporation."
The new court order follows an announcement by US banking giant Citigroup late Saturday that it had been granted an injunction by a New York state court, extending its exclusive rights to negotiate a merger with Wachovia after Wells Fargo muscled in on the talks last week and announced a takeover of its own.
The battle for Wachovia is part of the great redrawing of the US financial landscape as commercial and investment banks go bust or seek takeovers because of losses linked to the subprime housing market.
The planned acquisition by Wells Fargo, which traces its roots to the Wild West and the Gold Rush of the 19th century, would give it the biggest network of branches in the United States.
If the deal were to go through, Wells Fargo would have 10,761 branches, 4,618 more than Bank of America Corp., which currently has the most branches.
It has offered US$15.1 billion in an all-stock deal to buy all of Wachovia and it stressed that its proposal did not have any government involvement or taxpayer risk.
Citigroup offered to pay US$2.16 billion in stock for Wachovia's banking activities and some of its debts.
Citigroup would assume up to US$42 billion of losses from a pool of US$312 billion of loans held by Wachovia; the Federal Deposit Insurance Corporation (FDIC) would absorb losses beyond that.
The Citigroup takeover was orchestrated with the Federal Reserve and Treasury Secretary Henry Paulson in consultation with US President George W. Bush.
- AFP/yb
|
