NU Online News Service, Feb. 19, 11:01 a.m. – Prudential Financial Inc., Newark, N.J., has agreed to turn control of its retail brokerage operations over to Wachovia Corp., Charlotte, N.C.
Wachovia would fold the Prudential operations into Wachovia Securities and run the combined entity from headquarters in Richmond, Va.
John Strangfeld, head of Prudential’s investment division, would be chairman of the new Wachovia Securities, and Prudential would end up with a 38% ownership stake.
But Strangfeld would report to Donald McMullen Jr., president of Wachovia’s Capital Management Group, and David Ludeman, president of Wachovia Securities, would be the president of the combined entity.
Wachovia would own a 62% stake, and it would name three of the five board members.
The new Wachovia Securities would be the third largest securities brokerage firm in the United States, with $537 billion in client assets, more than $4 billion in annual revenue and 3,500 brokerage locations, the companies say.
The companies say they hope to complete the deal by Sept. 30.
Prudential notes that the deal would include its Private Client Group and Wexford Clearing Services Corp., but that it would exclude its stock research department, its stock sales and trading group, its international private client operations, its international derivatives operations, and its Prudential Bank and Trust unit.