CHARLOTTE, N.C. - Wachovia Corp. announced Wednesday that it has agreed to acquire Prudential Financial Inc.'s retail brokerage unit, creating the nation's third-largest brokerage.
The deal, which comes after months of negotiations, combines the companies' retail securities brokerage and clearing operations to create a new business that will be known as Wachovia Securities, the companies said in a statement.
Wachovia and Prudential both operate brokerage offices in Augusta.
Officials said the new company should be able to compete better against industry leaders such as Merrill Lynch and Citigroup's Salomon Smith Barney.
"We are always looking for ways to expand and leverage our distribution network," Wachovia Chairman and Chief Executive Ken Thompson told industry analysts in a conference call. "The opportunity to essentially double in size at little or no cost is compelling at the least."
Charlotte-based Wachovia, the nation's fourth-largest bank, would have a 62 percent stake in the new business, while Newark, N.J.-based Prudential would own the remainder.
"No money is trading hands," Wachovia spokesman Tony Mattera said. "Both companies are contributing their brokerage firms to the combined firm in exchange for an ownership stake."
The new company will have combined client assets of $537 billion and combined estimated net revenues of $4.2 billion in 2002, the companies said.