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Wachovia buys Golden West Financial

Wachovia Corporation, the US's fourth largest bank, has announced that it is to purchase California's Golden West Financial Corporation in a deal worth an estimated $25 billion.

The deal, which is expected to be finalized towards the end of this year, is the largest ever purchase by Wachovia, and will provide the bank with 285 new consumer bank branches in California and other western states, marking its first big presence in the region.

Commenting on the new acquisition, Ken Thompson, Wachovia chairman and CEO, said that Golden West had made impressive earnings in the past, something he hopes will continue following the takeover.

"Golden West has taken industry-wide challenges in its stride, and the result is an astonishing 25-year track record of 17 per cent compound annual growth in earnings per share and virtually no credit losses realized even in the toughest year in its history," Mr Thompson said.

"We believe this combination of our two companies, both known for exceptional customer service and pristine credit quality, will generate superior long-term growth in earnings per share."

Industry observers have suggested that the acquisition is part of Wachovia's efforts to begin competing with the likes of US-based banking giants Citigroup and Bank of America.