First Union, Wachovia Merger Cleared by Fed

The Federal Reserve said it cleared First Union Corp. to buy North Carolina rival Wachovia Corp., removing the last major hurdle to the bitterly contested $14.6-billion bank merger.

Wachovia’s shareholders approved First Union’s proposal earlier this month, ending a spirited battle over the Southeast regional bank with rival suitor SunTrust Banks Inc .

The deal will create the No. 4 U.S. bank with 19 million customers, $321 billion in assets and 90,000 employees.

First Union and Wachovia last month agreed to sell 38 branches in response to antitrust concerns. The companies said they expect to complete the deal in early September.

First Union shares fell 6 cents at $35.90, while Wachovia closed unchanged at $72.16 on the New York Stock Exchange.