Fed Backs 1st Union Deal for Wheat First

The Federal Reserve Board last week gave First Union Corp. permission to acquire Wheat First Butcher Singer Inc.

First Union will combine the Richmond, Va., investment banking and brokerage house with its existing section 20 unit, which already offers commercial debt and equity underwriting services.

To win approval, First Union agreed to divest within two years Wheat First's real estate and insurance units and to stop making additional investments in these businesses during the interim.

First Union expects to close the deal by early next year, a spokeswoman said.

In the past three months, the Fed has approved NationsBank Corp.'s acquisition of Montgomery Securities, BankAmerica Corp.'s purchase of Robertson, Stephens & Co., and Canadian Imperial Bank of Commerce's takeover of Oppenheimer Holdings Inc.

Separately, First Union was preparing late Friday to complete its purchase of Signet Banking Corp., Richmond. The stock transaction, valued at about $3.25 billion, was announced July 21. The deal lifts First Union's assets by $12 billion, to $156 billion, and boosts it three notches, to first place, in Virginia market share.

- Jaret Seiberg and Debra Cope

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