2014

Wachovia Securities and A.G. Edwards to Join Forces to Form Premier Nationwide Financial Advisory Firm Combination creates 2nd largest retail brokerage firm in the U.S.



    ST. LOUIS and CHARLOTTE, N.C., May 31 /PRNewswire-FirstCall/ --
 Wachovia Corp. (NYSE:   WB) and A.G. Edwards Inc. (NYSE:   AGE) announced today
 an agreement under which Wachovia will acquire A.G. Edwards, which will be
 combined with Wachovia Securities, LLC, to create an industry-leading
 retail brokerage firm with $1.1 trillion in client assets and nearly 15,000
 financial advisors. The combined firm will have an enhanced share of the
 U.S. brokerage market with significantly increased penetration in 48 of the
 50 largest metropolitan statistical areas.
     The combined full-service firm will have a national footprint of 3,350
 brokerage locations, including 1,500 dedicated retail offices in all 50
 states and the District of Columbia. The combined organization will offer
 objective advice to clients based on research from multiple providers,
 provide industry-leading customer service using an open architecture
 platform, and have access to a broad suite of financial products and
 services.
     "The long-term growth opportunities of the brokerage industry are
 extremely compelling to Wachovia, and we have long expressed our interest
 in growing this business both organically and through acquisition," said
 Ken Thompson, Wachovia chairman and CEO. "This combination with A.G.
 Edwards, which is widely considered one of the most highly regarded
 remaining independent brokerage firms in the industry, will further enhance
 our scale and relevance."
     The combined retail brokerage organization will be headquartered in St.
 Louis, Missouri. Other A.G. Edwards businesses including research,
 underwriting and investment banking, mutual funds and trust will be
 consolidated into the appropriate Wachovia lines of business. The combined
 firm will operate as Wachovia Securities. The merger is expected to be
 completed in the fourth quarter of 2007 and integration is expected to be
 completed by the end of the first quarter of 2009.
     Daniel J. Ludeman, a 27-year veteran of the brokerage industry, is
 currently president and CEO of Wachovia Securities and will be the
 president and CEO of the combined brokerage firm. Robert L. Bagby, who has
 been chairman and CEO of A.G. Edwards since 2001, will serve as chairman of
 the combined brokerage firm. He joined A.G. Edwards in 1975.
     "This combination will bring together two similar companies determined
 to preserve and enhance a corporate culture that is focused on attracting
 the nation's best financial advisors, respecting client relationships,
 providing unbiased advice and delivering excellent client service," said
 Bagby. "In assessing potential merger partners, we looked carefully for an
 organization that would offer A.G. Edwards the scale and enriched product
 suite required to fuel continued growth, while preserving the
 characteristics and culture that have made our organization so successful.
 In Wachovia Securities, we believe we found the perfect partner."
     Wachovia Securities reports to David Carroll, president of Wachovia
 Corporation's Capital Management Group. As consolidation continues in the
 brokerage industry, the opportunity to combine with a premier firm like
 A.G. Edwards was "a rare chance to solidify our leadership in the industry
 with the scope and resources required to be the firm of choice for clients
 and for quality financial advisors," Carroll said. "Our focus on providing
 our advisors and consultants with best-in-class tools, products and support
 to meet their clients' needs will help us continue to enhance the
 productivity and efficiency of our combined firm."
     Carroll noted that Wachovia is known for its success and expertise in
 integrations, including six brokerage firms since 1998, of which the joint
 venture with Prudential Securities was the largest.
     John Strangfeld, vice chairman of Prudential Financial, Inc. [NYSE:  
 PRU], which currently owns 38 percent of Wachovia Securities, said, "We are
 very pleased with our investment in Wachovia Securities and our partnership
 with Wachovia management. We believe the combination of A.G. Edwards and
 Wachovia Securities is highly attractive and takes the business to a new
 level of prominence and promise. We have complete confidence in
 management's ability to make this deal successful."
     Under the terms of the agreement, A.G. Edwards' shareholders will
 receive 0.9844 shares of Wachovia common stock and $35.80 in cash for each
 of their A.G. Edwards common shares. Based on Wachovia's share price at the
 close of business on May 30, 2007, the transaction would be valued at
 $89.50 per A.G. Edwards share.
     The combined organization is expected to benefit from significant
 annual expense efficiencies, estimated at $395 million after tax by 2009.
 These efficiencies represent 10 percent of the combined firm's most recent
 fiscal year-end expense base. Wachovia is expected to record merger-related
 and restructuring charges and exit cost purchase accounting adjustments of
 approximately $860 million after tax in connection with the transaction
 over the 18-month integration period.
     The transaction is anticipated to be accretive to Wachovia's earnings
 per share excluding merger-related and restructuring expense and
 intangibles amortization in the first full year following the closing, not
 including the effect of one-time charges. The transaction also provides an
 internal rate of return of 24 percent, far exceeding Wachovia's cost of
 capital. Completion of the merger is subject to A.G. Edwards' shareholder
 approval and normal regulatory approvals. Credit Suisse Securities (USA)
 LLC, Wachovia Securities and Simpson Thacher & Bartlett LLP represented
 Wachovia, and Goldman, Sachs & Co. and Wachtell, Lipton, Rosen & Katz
 represented A.G. Edwards.
     A.G. Edwards Dividend: In an unrelated announcement, the Board of
 Directors of A.G. Edwards, Inc. announced today a regular quarterly cash
 dividend of 20 cents per share, payable on July 2, 2007, to stockholders of
 record June 8, 2007.
     About Wachovia and Wachovia Securities LLC
     Wachovia Corporation (NYSE:   WB) is one of the nation's largest
 diversified financial services companies, providing a broad range of retail
 banking and brokerage, asset and wealth management, and corporate and
 investment banking products and services. Wachovia has retail and
 commercial banking operations in 21 states with 3,400 retail banking
 offices from Connecticut to Florida and west to Texas and California.
 Nationwide, Wachovia provides retail brokerage products and services in 48
 states, mortgage lending in all 50 states and auto finance covering 46
 states. Globally, clients are served in selected corporate and
 institutional sectors and through more than 40 international offices.
 Online banking is available at wachovia.com; online brokerage products and
 services at wachoviasec.com; and investment products and services at
 evergreeninvestments.com. At March 31, 2007, Wachovia had assets of $706.4
 billion and market capitalization of $105.3 billion.
     Wachovia Securities is one of the nation's largest full service retail
 brokerage firms with more than $773 billion in client assets, providing
 financial advisory, brokerage, asset management and other financial
 services through approximately 10,700 registered representatives in more
 than 2,600 locations nationwide as of March 31, 2007. Wachovia Securities
 is the trade name used by two separate, registered broker-dealers and
 non-bank affiliates of Wachovia Corporation providing certain retail
 securities brokerage services: Wachovia Securities, LLC, member NYSE/SIPC,
 and Wachovia Securities Financial Network, LLC, member NASD/SIPC.
     About A.G. Edwards
     A.G. Edwards, Inc. is a financial services holding company whose
 primary subsidiary is the national investment firm of A.G. Edwards & Sons,
 Inc. Drawn to the firm's client-first philosophy, individuals and
 businesses have turned to A.G. Edwards, Inc. for sound advice and access to
 a wide array of investment products and services that can help them meet
 their financial goals and objectives. Founded in 1887, A.G. Edwards and its
 affiliates employ 6,618 financial consultants in 742 offices nationwide and
 two European locations in London and Geneva. More information can be found
 on agedwards.com.
     Announcement Conference Call: Executives from both companies will
 discuss the merger of the brokerage firms on a conference call today at 9
 a.m. Eastern time. The call will be available by telephone and audio
 webcast. During the call, the speakers will review information presented in
 handouts that are available through wachovia.com/investor. Participants are
 encouraged to access the handouts before the teleconference begins.
     Webcast Instructions: To access the audio webcast go to
 wachovia.com/investor and click on the audio webcast link. Please log on to
 the website at least 10 minutes prior to the call to register and download
 and install any necessary audio software. A replay of the webcast also will
 be available beginning by 1 p.m. Eastern time today.
     Teleconference Instructions: The telephone number for today's
 conference call is 888-357-9787 for U.S. callers (706-679-7342 for
 international callers). You will be asked to provide your name and business
 affiliation. Mention the conference access code: Wachovia. A continuous
 telephone replay will be available by 1 p.m. Eastern time today through 5
 p.m. Eastern time on June 29. The replay telephone number is 706-645-9291,
 access code: 2879501.
     Video News Release: B-roll and soundbites from David Carroll, head of
 the Capital Mangement Group at Wachvoia, can be downlinked from the
 following coordinates: Galaxy 25C, Transponder 23, 11 a.m. to 11:15 a.m.
 Eastern time, Thursday, May 31. Downlink frequency 4160 MHz (V).
     Forward Looking Statements
     This news release contains, and the webcast discussed above will
 contain, certain forward-looking statements with respect to each of
 Wachovia and A.G. Edwards and the combined company following the proposed
 merger between Wachovia and A.G. Edwards (the "Merger"), as well as the
 goals, plans, objectives, intentions, expectations, financial condition,
 results of operations, future performance and business of Wachovia,
 including, without limitation, (i) statements relating to the benefits of
 the Merger, including future financial and operating results, cost savings,
 enhanced revenues and the accretion/dilution to reported earnings that may
 be realized from the Merger, (ii) statements relating to the benefits of
 the merger between Wachovia and Golden West Financial Corporation ("Golden
 West") completed on October 1, 2006 (the "Golden West Merger"), including
 future financial and operating results, cost savings, enhanced revenues and
 the accretion to reported earnings that may be realized from the Golden
 West Merger, (iii) statements regarding certain of Wachovia's and/or A.G.
 Edwards' goals and expectations with respect to earnings, earnings per
 share, revenue, expenses and the growth rate in such items, as well as
 other measures of economic performance, including statements relating to
 estimates of Wachovia's credit quality trends, and (iv) statements preceded
 by, followed by or that include the words "may", "could", "should",
 "would", "believe", "anticipate", "estimate", "expect", "intend", "plan",
 "projects", "outlook" or similar expressions. These statements are based
 upon the current beliefs and expectations of Wachovia's management and are
 subject to significant risks and uncertainties. Actual results may differ
 from those set forth in the forward- looking statements. These
 forward-looking statements involve certain risks and uncertainties that are
 subject to change based on various factors (many of which are beyond
 Wachovia's and A.G. Edwards' control).
     The following factors, among others, could cause Wachovia's financial
 performance to differ materially from that expressed in such
 forward-looking statements: (1) the risk that the businesses of Wachovia
 and A.G. Edwards, in connection with the Merger or the businesses of
 Wachovia and Golden West in connection with the Golden West Merger will not
 be integrated successfully or such integration may be more difficult,
 time-consuming or costly than expected; (2) the risk that expected revenue
 synergies and cost savings from the Merger or the Golden West Merger may
 not be fully realized or realized within the expected time frame; (3) the
 risk that revenues following the Merger or the Golden West Merger may be
 lower than expected; (4) deposit attrition, operating costs, customer loss
 and business disruption following the Merger or the Golden West Merger,
 including, without limitation, difficulties in maintaining relationships
 with employees, may be greater than expected; (5) the inability to obtain
 governmental approvals of the Merger on the proposed terms and schedule;
 (6) the failure of A.G. Edwards' shareholders to approve the Merger; (7)
 the risk that the strength of the United States economy in general and the
 strength of the local economies in which Wachovia and/or A.G. Edwards
 conducts operations may be different than expected resulting in, among
 other things, a deterioration in credit quality or a reduced demand for
 credit, including the resultant effect on Wachovia's loan portfolio and
 allowance for loan losses; (8) the effects of, and changes in, trade,
 monetary and fiscal policies and laws, including interest rate policies of
 the Board of Governors of the Federal Reserve System; (9) potential or
 actual litigation; (10) inflation, interest rate, market and monetary
 fluctuations; and (11) adverse conditions in the stock market, the public
 debt market and other capital markets (including changes in interest rate
 conditions) and the impact of such conditions on Wachovia's and A.G.
 Edwards' brokerage and capital markets activities. Additional factors that
 could cause Wachovia's and A.G. Edwards' results to differ materially from
 those described in the forward-looking statements can be found in
 Wachovia's and A.G. Edwards' Annual Reports on Form 10-K, Quarterly Reports
 on Form 10-Q and Current Reports on Form 8-K filed with the SEC. All
 subsequent written and oral forward-looking statements concerning Wachovia
 or the proposed Merger or other matters and attributable to Wachovia or
 A.G. Edwards or any person acting on their behalf are expressly qualified
 in their entirety by the cautionary statements above. Wachovia and A.G.
 Edwards do not undertake any obligation to update any forward-looking
 statement, whether written or oral, relating to the matters discussed in
 this filing.
     Additional Information
     The proposed Merger will be submitted to A.G. Edwards' shareholders for
 their consideration. Wachovia will file a registration statement with the
 SEC, which will include a proxy statement/prospectus regarding the proposed
 Merger. A.G. Edwards' shareholders and other investors are urged to read
 the registration statement and the proxy statement/prospectus when they
 become available, as well as any other relevant documents concerning the
 proposed Merger filed with the SEC (and any amendments or supplements to
 those documents), because they will contain important information. You will
 be able to obtain a free copy of the registration statement and the proxy
 statement/prospectus, as well as other filings containing information about
 Wachovia and A.G. Edwards, at the SEC's website (http://www.sec.gov) and at
 the companies' respective websites, www.wachovia.com and www.agedwards.com.
 Copies of the proxy statement/prospectus and the SEC filings that will be
 incorporated by reference in the proxy statement/prospectus can also be
 obtained, free of charge, by directing a request to Wachovia Corporation,
 Investor Relations, One Wachovia Center, 301 South College Street,
 Charlotte, NC 28288-0206, 704-383-0798; or to A.G. Edwards, Inc., Investor
 Relations, One North Jefferson Avenue, St. Louis, MO 63103, 314-955-3000.
     Wachovia and A.G. Edwards and their respective directors and executive
 officers, may be deemed to be participants in the solicitation of proxies
 from the shareholders of A.G. Edwards in connection with the proposed
 Merger. Information about the directors and executive officers of Wachovia
 is set forth in the proxy statement for Wachovia's 2007 annual meeting of
 shareholders, as filed with the SEC on a Schedule 14A on March 9, 2007.
 Information about the directors and executive officers of A.G. Edwards is
 set forth in the proxy statement for A.G. Edwards' 2007 annual meeting of
 shareholders, as filed with the SEC on a Schedule 14A on May 15, 2007.
 Additional information regarding the interests of those participants and
 other persons who may be deemed participants in the Merger may be obtained
 by reading the proxy statement/-prospectus regarding the proposed Merger
 when it becomes available. You may obtain free copies of these documents as
 described in the preceding paragraph.
 
 

SOURCE Wachovia Corporation

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