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Last Updated: Monday, 8 May 2006, 19:43 GMT 20:43 UK
Wachovia goes West in Golden deal
The merged bank will have assets of $669bn
Wachovia, the fourth biggest bank in the US, is to buy California-based mortgage specialist Golden West for $25.5bn (13.7bn).

The consolidation will increase Wachovia's presence, particularly in the fast-growing western states.

Wachovia said the enlarged company would have franchises within reach of around 55% of the US population.

The deal also sparked speculation that Wachovia's rivals could embark on the takeover trail - possibly overseas.

Such hopes helped to push UK banking stocks on the London stock exchange higher on Monday in afternoon trading.

But when the markets closed stocks fell back down again. Lloyds TSB, fell to 530.5 pence having hit 538.3p earlier in the day while Royal Bank of Scotland, which had reached 1848p in earlier trading, dipped to 1828p.

'Cost savings'

Golden West has a 285-branch network across 10 states, as well as being one of the country's largest mortgage lenders.

It is best known for its adjustable-rate mortgage lending, operated under the World Savings Bank brand.

Golden West chairman and chief executive Herbert Sandler said Wachovia was one of the United States' most admired financial institutions.

"We share the same values of operating with integrity, putting customers first and encouraging teamwork," he said.

Based on the takeover price, the stake that Mr Sandler and his wife Marion - who founded the company together in 1963 - hold in Golden West is worth $4.9bn.

North Carolina-based Wachovia expects the merger will produce annual cost savings of $53m while the combined company will have $669bn in assets.

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