The two banks "signed a definitive agreement for the merger of the two companies" without government assistance, Wells Fargo said in a statement.
Prior to receiving the Wells Fargo proposal, Wachovia had been negotiating with Citi to complete a transaction supervised by the Federal Deposit Insurance Corporation (FDIC) that included assistance from the government.
Wells Fargo said it expects to incur merger and integration charges of about $10 billion. Wells Fargo intends to issue up to $20 billion in new Wells Fargo securities, primarily common stock, "to maintain its strong capital position".
A Wachovia spokeswoman said neither Citi nor the FDIC is involved in the transaction. Citi officials did not immediately return calls for comment, although the Citi/Wachovia deal was still featured prominently on Citi's website Friday morning.
"This deal enables us to keep Wachovia intact and preserve the value of an integrated company, without government support," Reuters quoted Wachovia President and Chief Executive Robert Steel as saying.
Wachovia's board approved Wells Fargo's offer Thursday night.
The combined company would base its East Coast retail and commercial and corporate banking business in
European stocks rose and Wall Street was set for a firmer as the Wells Fargo move lifted investor spirits, despite figures showing steep job losses in the