Wachovia Chairman and Chief Executive Ken Thompson told CNBC the acquisition of A.G. Edwards, announced Thursday, would double Wachovia's size and give them further reach into affluent and retirement markets.
"This one [acquisition] really makes us an in-game player in brokerage,” Thompson said, on CNBC's "Squawk Box."
Wachovia agreed to buy A.G. Edwards for about $6.8 billion in cash and stock, creating the second-largest retail brokerage in the United States.
The deal calls for the exchange of 0.9844 shares of Wachovia common stock and $35.80 in cash for each A.G. Edwards share. The deal represents a 16% premium to A.G. Edwards' closing share price Wednesday.
Wachovia , the fourth-largest U.S. bank, will combine A.G. Edwards with its brokerage business, Wachovia Securities, pushing the company deeper into metropolitan areas.
The deal comes roughly seven months after Wachovia completed its $24.2 billion purchase of U.S. savings and loan company Golden West Financial Corp.
According Thompson, this latest transaction will also strength its investment-banking business and strengthen its underwriting efforts.
“If, in fact, we do see a waning of interest in the retail brokerage market, then this merger is going to be a great one for us because we’ll take out about $640 million of cost when we put two organizations together,” Thompson said.