Wells Fargo & Co., the nation’s seventh-largest banking company, plans to buy First Security Corp. for about $2.9 billion in stock.
Under the deal announced Monday, the combined company would have assets of about $241 billion, operations in 23 states and would rank as the largest bank in Utah, Nevada, Idaho and New Mexico.
The deal comes just 10 days after First Security’s plans to merge with another Utah bank, Zions Bancorp., were shot down by Zions shareholders.
The Zions merger had originally valued First Security at $5.9 billion, but First Security stock tumbled from a December high of $31 to $10.75 after First Security warned its earnings would fall 27 percent in the first quarter.
The agreement values First Security at $14.11 a share, a 16 percent premium to its closing price on Friday. On Monday, First Security shares rose $1.19, or 9.7 percent, to $13.37, on the Nasdaq stock market; Wells Fargo shares fell 25 cents, to $39.50, on the New York Stock Exchange.
Spencer F. Eccles, First Security’s chairman and chief executive, said his company decided on the deal with Wells Fargo “after careful consideration of our alternatives.”
Wells Fargo Chief Executive Dick Kovacevich said “the customers and cultures of our two companies are remarkably similar.”
Wells Fargo also expects to take $375 million in charges related to the deal.