Bank One To Buy Wachovia Portfolio
WINSTON-SALEM, N.C. (AP) _ Bank One Corp. has agreed to purchase Wachovia Corp.’s $8 billion consumer credit card portfolio for undisclosed terms.
The companies said the deal announced Monday is expected to close in the second quarter and is subject to regulatory approval.
Wachovia, with about 2.8 million customer credit card accounts, expects to report a pretax gain of approximately $1.4 billion upon completion of the transaction.
Wachovia announced in February that it was exploring alternatives for its credit card business. The company told investors last month that proceeds from a portfolio sale could include internal reinvestment, strategic acquisitions and share repurchases.
Bank One expects the transaction to add $100 million per year to its earnings after taxes, assuming current economic conditions.
The companies also entered into an agreement under which Wachovia will offer its branded credit cards to retail customers, with servicing provided by First USA, Bank One’s credit card subsidiary.
In morning trading on the New York Stock Exchange, Bank One shares were up 35 cents at $33.96 while Wachovia shares were up 80 cents at $59.15.
Bank One, with assets of more than $265 billion, is the nation’s fifth-largest bank holding company.
Wachovia, with dual headquarters in Winston-Salem and Atlanta, has assets of about $74 billion. Its principal subsidiary, Wachovia Bank, N.A., has more than 650 offices, primarily in Florida, Georgia, North Carolina, South Carolina and Virginia.
On the Net:
Bank One site: http://www.bankone.com