The Federal Reserve Board on Wednesday approved Norwest Corp.'s $28.5 billion acquisition of Wells Fargo & Co. When the deal is completed later this month, the combined bank would be the country's seventh-largest, with assets of $191 billion.
Following the Justice Department's lead, the Fed's 95-page order requires the divestiture of 26 branches with $1.18 billion of deposits in 14 markets in Arizona and Nevada.
The Fed voted 5 to 0 in favor of the combination, with Governor Edward Kelley not voting. Shareholders are expected to approve the combination at meetings scheduled for Oct. 20 in Minneapolis, where Norwest is based, and Wells Fargo's headquarters city of San Francisco.
The two banks unveiled their merger plans June 8 in a stock exchange initially valued at $34 billion. Falling stock prices since then have decreased the value to $28.49 billion at current prices. Norwest shares closed Wednesday up 50 cents, to $33.375 , while Wells Fargo gained $6.0625, to $332.625.
The exchange would leave Wells Fargo stockholders with about 52.5% ownership of the combined companies. The combined bank, to be called Wells Fargo & Co. and based in San Francisco, would stretch from the Midwest to the West Coast with 20 million customers, 5,777 bank branches, and 90,000 workers.