Notable Mergers and Acquisitions of the Day 10/13: WFC/WB, MTU/MS, STD/SOV

October 13, 2008 9:37 AM EDT

• The Federal Reserve Board on Sunday announced its approval of the application and notice under sections 3 and 4 of the Bank Holding Company Act by Wells Fargo & Company (NYSE: WFC), San Francisco, California, to acquire Wachovia Corporation (NYSE: WB) and its subsidiary banks, Wachovia Bank, National Association, both of Charlotte, North Carolina, and Wachovia Bank Delaware, National Association, Wilmington, Delaware, and the nonbanking subsidiaries of Wachovia Corporation.
  
  
• Mitsubishi UFJ Financial Group, Inc. (NYSE: MTU) closed its $9 billion equity investment in Morgan Stanley (NYSE: MS), which gives Mitsubishi UFJ a 21% ownership interest in Morgan Stanley.
  
  Under the revised terms of the transaction, MUFG has acquired $7.8 billion of perpetual non-cumulative convertible preferred stock with a 10 percent dividend and a conversion price of $25.25 per share, and $1.2 billion of perpetual non-cumulative non-convertible preferred stock with a 10 percent dividend.
  
  The MUFG investment further bolsters Morgan Stanley's already strong capital position. Morgan Stanley's Tier 1 Capital Ratio is now estimated to be more than 15.5 percent on a pro-forma basis as of August 31, 2008. This is far in excess of the 6 percent required by the Federal Reserve to be treated as well-capitalized and is one of the highest Tier 1 Capital Ratios among bank holding companies peers. The MUFG investment also reduces Morgan Stanley's leverage ratio to just under 20 times and its adjusted leverage ratio to just over 10 times on a pro-forma basis at August 31, 2008. In addition, Morgan Stanley has continued to reduce the size of its balance sheet since the end of the third quarter. As of today, total assets are now under $900 billion, down from $987 billion at August 31, 2008.
  
  
• Santander (NYSE: STD) is in talks to buy embattled U.S. bank Soverign Bancorp, Inc. (NYSE: SOV). Reports from the Wall Street Journal suggest Stantander will pay a price close to Friday's closing price of Soverign of $3.81 per share.
  
  Stantander already owns a 24.4% stake in Soverign Bancorp.

To see all the Mergers & Acquisitions for today in real-time go to http://www.streetinsider.com/Mergers+and+Acquisitions

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• Morgan Stanley
• Wachovia
• Notable Mergers and Acquisitions
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