Federal Regulators Approve Bank Merger

Wells Fargo & Co.’s acquisition of First Interstate Bancorp won approval by state and federal antitrust regulators Wednesday after the banks agreed to sell 61 California branches with $2.54 billion in deposits.

It was the third-largest divestiture ever required by the U.S. Justice Department’s antitrust division as a condition of approving a merger, spokeswoman Gina Talamona said.

The takeover agreement announced in late January, after a hostile bidding war between Wells Fargo and First Bank System Inc. of Minneapolis, involves an exchange of stock valued Wednesday at $13.5 billion - the richest ever in banking history. It will create the nation’s eighth-largest bank.

The banks had said they would close 350 offices in California. However, a joint investigation by the department and California Attorney General Dan Lungren found the deal would lessen competition in banking services for small and medium-sized businesses in almost 30 markets.

To overcome that objection, the banks agreed to sell off 61 First Interstate branch offices.