Wells Fargo & Co. announced plans to acquire First Security Corp. of Salt Lake City for approximately $2.9 billion in stock.
The deal comes eight days after the First Security board of directors terminated a previous merger agreement with Zions Bancorp. Zions' shareholders had rejected the proposed merger on April 1.
``After careful consideration of our alternatives, we believe it's in the long-term best interests of our employees, customers, communities and stockholders that First Security partner with an outstanding organization whose vision, values, and history are very similar to ours,'' said Spencer F. Eccles, First Security's chairman and chief executive officer.
San Francisco-based Wells Fargo has agreed to exchange 0.355 share of its stock for each First Security share. Based on Friday's closing stock prices, the deal would be valued at $2.9 billion. (In a press release, Wells Fargo valued the deal at $3.2 billion; it used an April 3 closing stock price of $43.6875 to reach that figure.) The $23 billion-asset First Security has approximately 206 million diluted shares
Wells Fargo said the deal will require approximately $375 million in integration-related charges, and it expects to divest $1.2 billion of deposits and associated loans.
First Security operates offices in Utah, Idaho, New Mexico, Nevada, California, Oregon, and Wyoming. Wells Fargo has $218 billion of assets. It operates branches in 23 states.
The deal awaits regulatory and shareholder approvals. It is expected to close in the second half of this year.