Pursuant to Rule 425 under the Securities
Act of 1933 and deemed filed pursuant to
Rule 14a-6(b) under the Securities Exchange
Act of 1934
Subject Company: Wachovia Corporation
Commission File No. 333-59616
Date: July 23, 2001
This filing contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements include,
but are not limited to, (i) statements about the benefits of the merger between
First Union Corporation and Wachovia Corporation, including future financial and
operating results, cost savings, enhanced revenues, and accretion to reported
earnings that may be realized from the merger; (ii) statements with respect to
First Union's and Wachovia's plans, objectives, expectations and intentions and
other statements that are not historical facts; and (iii) other statements
identified by words such as "believes", "expects", "anticipates", "estimates",
"intends", "plans", "targets", "projects" and similar expressions. These
statements are based upon the current beliefs and expectations of First Union's
and Wachovia's management and are subject to significant risks and
uncertainties. Actual results may differ from those set forth in the
forward-looking statements.
The following factors, among others, could cause actual results to
differ materially from the anticipated results or other expectations expressed
in the forward-looking statements: (1) the risk that the businesses of First
Union and Wachovia will not be integrated successfully or such integration may
be more difficult, time-consuming or costly than expected; (2) expected revenue
synergies and cost savings from the merger may not be fully realized or realized
within the expected time frame; (3) revenues following the merger may be lower
than expected; (4) deposit attrition, operating costs, customer loss and
business disruption following the merger, including, without limitation,
difficulties in maintaining relationships with employees, may be greater than
expected; (5) the ability to obtain governmental approvals of the merger on the
proposed terms and schedule; (6) the failure of First Union's and Wachovia's
stockholders to approve the merger; (7) competitive pressures among depository
and other financial institutions may increase significantly and have an effect
on pricing, spending, third-party relationships and revenues; (8) the strength
of the United States economy in general and the strength of the local economies
in which the combined company will conduct operations may be different than
expected resulting in, among other things, a
deterioration in credit quality or a reduced demand for credit, including the
resultant effect on the combined company's loan portfolio and allowance for loan
losses; (9) changes in the U.S. and foreign legal and regulatory framework; and
(10) adverse conditions in the stock market, the public debt market and other
capital markets (including changes in interest rate conditions) and the impact
of such conditions on the combined company's capital markets and asset
management activities. Additional factors that could cause First Union's and
Wachovia's results to differ materially from those described in the
forward-looking statements can be found in First Union's and Wachovia's reports
(such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K) filed with the Securities and Exchange Commission and
available at the SEC's Internet site (http://www.sec.gov). All subsequent
written and oral forward-looking statements concerning the proposed transaction
or other matters attributable to First Union or Wachovia or any person acting on
their behalf are expressly qualified in their entirety by the cautionary
statements above. First Union and Wachovia do not undertake any obligation to
update any forward-looking statement to reflect circumstances or events that
occur after the date the forward-looking statements are made.
The proposed transaction will be submitted to First Union's and Wachovia's
stockholders for their consideration. Stockholders are urged to read the
definitive joint proxy statement/prospectus regarding the proposed transaction
and any other relevant documents filed with the SEC, as well as any amendments
or supplements to those documents, because they contain (or will contain)
important information. You will be able to obtain a free copy of the joint proxy
statement/prospectus, as well as other filings containing information about
First Union and Wachovia, at the SEC's Internet site (http://www.sec.gov).
Copies of the joint proxy statement/prospectus and the SEC filings that have
been or will be incorporated by reference in the joint proxy
statement/prospectus can also be obtained, without charge, by directing a
request to First Union, Investor Relations, One First Union Center, Charlotte,
North Carolina 28288-0206 (704-374-6782), or to Wachovia, Investor Relations,
100 North Main Street, Winston-Salem, North Carolina 27150 (888-492-6397).
THE FOLLOWING NEWS RELEASE WAS ISSUED BY FIRST UNION AND WACHOVIA
[FIRST UNION LOGO] [WACHOVIA LOGO]
For Immediate Release
Media Contact:
First Union: Ginny Mackin 704-383-3715
Mary Eshet 704-383-7777
Wachovia: Ed Hutchins 336-732-4200
Jay Reed 336-732-5855
Investor Contact:
First Union: Alice Lehman 704-374-4139
Wachovia: Robert S. McCoy Jr. 336-732-5926
Marsha L. Smunt 336-732-5788
ISS RECOMMENDS FIRST UNION AND WACHOVIA SHAREHOLDERS
----------------------------------------------------
VOTE FOR MERGER OF EQUALS
-------------------------
Proxy Monitor Inc. Also Endorses First Union and Wachovia Combination
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CHARLOTTE AND WINSTON-SALEM N.C., July 23, 2001 - First Union Corporation (NYSE:
FTU) and Wachovia Corporation (NYSE: WB) announced today that two highly
regarded independent stockholder advisory organizations have recommended that
shareholders vote for the Wachovia and First Union merger of equals.
Institutional Shareholder Services Inc. (ISS), the nation's leading independent
stockholder advisory organization, issued a report recommending that Wachovia
shareholders and First Union shareholders vote for the proposed merger between
the two companies at Wachovia's annual shareholder meeting on August 3, 2001,
and at First Union's annual shareholder meeting on July 31, 2001.
In its report, ISS made several points on the long-term strategic merits of the
First Union/Wachovia combination. ISS said:
o "We believe that Wachovia shareholders would be best served voting in
favor of the pending First Union transaction."
o "It appears fair to conclude that Wachovia has all along sought
something more along the lines of a "strategic partnership"--a
transaction designed to enhance Wachovia's market position, growth
potential, and operating strategy, and thereby generate long-range
shareholder value--than a one-time sale designed to maximize immediate
shareholder returns."
o "We conclude that the merger agreement executed by Wachovia and First
Union deserves shareholder support...Furthermore, the weight of the
evidence suggests that Wachovia's board was adequately informed when it
approved the MOE agreement. In the absence of a proposal that offers a
substantial short-term premium or a clearly more compelling strategic
position than does the First Union deal, therefore, we believe that
shareholders are best served trusting the judgment of their directors,
of whom 13 (of 15) are independent."
ISS is the world's largest provider of proxy voting and corporate governance
services. It serves more than 700 institutional and corporate clients throughout
North America and Europe. ISS analyzes proxy proposals and issues vote
recommendations for more than 10,000 U.S. and 10,000 non-U.S. shareholder
meetings each year.
Proxy Monitor Inc., another highly regarded independent advisory organization,
also issued its recommendation that Wachovia shareholders vote for the First
Union merger proposal, citing the following:
o "We agree that this in-market merger of two strong regional banks could
be beneficial to the company's long-term growth and that it provides
significant opportunity for increased long-term share value in an
industry replete with similar transactions as banks continue to join
forces to compete in deregulated financial services markets.
o "What's more, we have found no compelling reason to abandon a merger
that, by all accounts, is fully and successfully underway, in favor of
a potential deal that is risky at best."
o And..."There is evidence that its strategic repositioning is working.
Since January 2001, First Union's stock is up by approximately 26%,
performing far better than the broader market (and SunTrust, for that
matter, with a year to date return of 10%)."
In a joint statement, the two companies said, "We welcome these independent,
third-party recommendations. Both reports represent another important milestone
in the process of completing this merger of equals. The recommendations reflect
an understanding of the compelling strategic and economic benefits of our
merger.
"In our view, a merger of First Union and Wachovia would create one of the
leading financial services companies in the United States and would provide
superior value to shareholders of Wachovia and First Union. We believe that
shareholders of both companies will enjoy immediate accretion in cash earnings
per share as well as strong prospects for a higher valuation through expansion
of the new Wachovia's price/earnings multiple. For Wachovia shareholders, we
believe the new Wachovia would offer a better dividend than SunTrust's
hypothetical dividend along with higher potential for dividend growth in the
future.
"The appropriate steps are being taken to complete this transaction and create
the new Wachovia in the very near future. We look forward to receiving
regulatory approval shortly, and we look forward to both First Union's and
Wachovia's shareholder meetings.
"Coming right on the heels of the North Carolina Business Court's resounding
validation of the Wachovia board's decision-making process to merge with First
Union, we believe the ISS and Proxy Monitor recommendations are further proof of
the momentum behind our merger of equals.
"We greatly appreciate the strong and broad support that the merger is receiving
from such diverse groups as employees, customers and community organizations.
Every vote is important. We urge all Wachovia and First Union shareholders to
vote for the First Union/Wachovia merger by returning the white proxy card."
First Union (NYSE:FTU), with $246 billion in assets and stockholders' equity of
$16 billion at June 30, 2001, is a leading provider of financial services to 15
million retail and corporate customers throughout the East Coast and the nation.
The company operates full-service banking offices in 11 East Coast states and
Washington, D.C., and full-service brokerage offices in 47 states and
internationally. Online banking products and services can be accessed through
www.firstunion.com.
Wachovia (NYSE:WB) is a major interstate financial holding company offering
banking and financial services to individuals primarily in Florida, Georgia,
North Carolina, South Carolina and Virginia and to corporations and institutions
throughout the United States and globally. Wachovia Corporation is headquartered
in Atlanta and Winston-Salem, N.C., and had assets of $74.8 billion at June 30,
2001. Wachovia's Web site is located at www.wachovia.com.
This news release may contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, including, without
limitation, (i) statements about the benefits of the merger between First Union
Corporation and Wachovia Corporation, including future financial and operating
results, cost savings, enhanced revenues, and accretion to reported earnings
that may be realized from the merger; (ii) statements with respect to First
Union's and Wachovia's plans, objectives, expectations and intentions and other
statements that are not historical facts; and (iii) other statements identified
by words such as "believes", "expects", "anticipates", "estimates", "intends",
"plans", "targets", "projects" and similar expressions. These statements are
based upon the current beliefs and expectations of First Union's and Wachovia's
management and are subject to significant risks and uncertainties. Actual
results may differ from those set forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements: (1) the risk that the businesses of First Union and
Wachovia will not be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected; (2) expected revenue
synergies and cost savings from the merger may not be fully realized or realized
within the expected time frame; (3) revenues following the merger may be lower
than expected; (4) deposit attrition, operating costs, customer loss and
business disruption following the merger, including, without limitation,
difficulties in maintaining relationships with employees, may be greater than
expected; (5) the ability to obtain governmental approvals of the merger on the
proposed terms and schedule; (6) the failure of First Union's and Wachovia's
stockholders to approve the merger; (7) competitive pressures among depository
and other financial institutions may increase significantly and have an effect
on pricing, spending, third-party relationships and revenues; (8) the strength
of the United States economy in general and the strength of the local economies
in which the combined company will conduct operations may be different than
expected resulting in, among other things, a deterioration in credit quality or
a reduced demand for credit, including the resultant effect on the combined
company's loan portfolio and allowance for loan losses; (9) changes in the U.S.
and foreign legal and regulatory framework; and (10) adverse conditions in the
stock market, the public debt market and other capital markets (including
changes in interest rate conditions) and the impact of such conditions on the
combined company's capital markets and asset
management activities. Additional factors that could cause First Union's and
Wachovia's results to differ materially from those described in the
forward-looking statements can be found in First Union's and Wachovia's reports
(such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K) filed with the Securities and Exchange Commission and
available at the SEC's Internet site (http://www.sec.gov). All subsequent
written and oral forward-looking statements concerning the proposed transaction
or other matters attributable to First Union or Wachovia or any person acting on
their behalf are expressly qualified in their entirety by the cautionary
statements above. First Union and Wachovia do not undertake any obligation to
update any forward-looking statement to reflect circumstances or events that
occur after the date the forward-looking statements are made.
Additional Information
The proposed transaction will be submitted to First Union's and Wachovia's
stockholders for their consideration. Stockholders are urged to read the
definitive joint proxy statement/prospectus regarding the proposed transaction
and any other relevant documents filed with the SEC, as well as any amendments
or supplements to those documents, because they contain (or will contain)
important information. You will be able to obtain a free copy of the joint proxy
statement/prospectus, as well as other filings containing information about
First Union and Wachovia, at the SEC's Internet site (http://www.sec.gov).
Copies of the joint proxy statement/prospectus and the SEC filings that have
been or will be incorporated by reference in the joint proxy
statement/prospectus can also be obtained, without charge, by directing a
request to First Union, Investor Relations, One First Union Center, Charlotte,
North Carolina 28288-0206 (704-374-6782), or to Wachovia, Investor Relations,
100 North Main Street, Winston-Salem, North Carolina 27150 (888-492-6397).