How’s this for the plot of a steamy romance novel: She’s a strong-willed Southern belle, born and raised in Winston-Salem, preparing to marry an ambitious although sometimes bumbling beau from Charlotte. But on the eve of the wedding, a previously spurned suitor from Atlanta suddenly reappears (picture Rhett Butler in a Porsche Boxster), flashing wads of cash and threatening dire consequences if his overtures are rejected again.
As juicy triangles go, the First Union-Wachovia-SunTrust imbroglio isn’t exactly a bodice-ripper — but for the buttoned-down world of banking business, the conflict and drama aren’t bad. There may not be sex (that’ll come in the TV miniseries), but there’s money (lots of it), power, allegations of deceit and betrayal and a flurry of legal action that could keep things in the courts and in the headlines for months.
In other words, it’s just what Wachovia and First Union had hoped to avoid as the two North Carolina-based banks try to consummate a merger that would create the nation’s fourth-largest banking conglomerate. Now, instead of quietly working out the details of a prenuptial agreement, they must turn their attention to convincing stockholders, financial analysts, judges and other interested parties that this is a better match than the “hostile takeover” by SunTrust, as Wachovia has characterized it in newspaper ads.
As investors weigh the two bids — $13.4 billion from First Union and $14.7 billion from SunTrust, at last tally — they’ll be trying to sort out which is the better deal for them. But without a single glance at balance sheets or potential stock dividends, it’s clear which is the better outcome for North Carolina and the Piedmont area in particular.
As North Carolina institutions, First Union and Wachovia have made substantial investments in the state, financially and civically. They have played major roles in shaping modern Charlotte and Winston-Salem, as well as the region’s economy as a whole. Having their headquarters here translates into more jobs, more stimulation for local economies and greater visibility in national and international financial circles as the state competes in the big leagues of business recruitment.
Nobody knows how much of that would be lost to Atlanta if the SunTrust bid were to prevail, but there’s no doubt the state will be poorer should it come to pass. A First Union-Wachovia merger may not be a match made in heaven, but it beats the heck out of one made in Georgia.
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