First Union to Buy Regional Brokerage

First Union Corp. said it will buy regional brokerage Wheat First Butcher Singer Inc. for $492.4 million in stock. The deal is the latest in a wave of brokerage acquisitions by commercial banks looking to expand and build strong franchises on Wall Street as the firewall between the two industries disappears. First Union, the nation’s sixth-biggest banking company, had planned to build its investment banking business from scratch but instead decided to buy one to avoid being left behind. The deal would create the largest retail brokerage in the Southeast and eighth-largest in the nation. Buying Wheat, which is based in Richmond, Va., would help First Union keep pace with other large commercial banks that are moving to add investment banking and brokerage services. NationsBank recently announced plans to buy Montgomery Securities for about $1.2 billion. Under the terms of the latest deal, First Union would pay 10.3 million shares of its stock for Wheat. The deal’s value is based on Charlotte, N.C.-based First Union’s stock price of $47.94 on Wednesday. The share price rose 88 cents in New York Stock Exchange trading.