Prudential Financial Inc. said it plans to sell its minority stake in Wachovia Securities to Wells Fargo & Co. and seek cash from the Treasury Department's rescue fund to rebuild capital.
The Newark, N.J., insurer said in a filing Thursday that it is exercising a previously granted right to sell its stake in the brokerage back to Wachovia, which is selling itself to Wells. The joint venture was formed in 2003, when Prudential combined its retail brokerage with Wachovia's in a cashless transaction.
The final price has not been set, Prudential said, but its stake in Wachovia Securities is worth about $5 billion before taxes.
Wachovia bought the St. Louis brokerage A.G. Edwards & Sons Inc. for more than $6 billion last year and folded it into Wachovia Securities. Prudential held 38% of Wachovia Securities before the A.G. Edwards purchase, which may have diluted the insurer's stake.
The sale is expected to close Jan. 1, 2010, and assumes the completion of Wachovia's sale to Wells, according to Prudential.
The insurer also said that it applied to participate in the Treasury's $250 billion Capital Purchase Program, and that no decision has been made on whether its request will be accepted.