Wachovia plans to buy AG Edwards.
This isn’t really a surprise. Regional brokerages, like AG Edwards, have become attractive buy-out targets to the biggest players in the financial industry.
The acquisition of AG Edwards by Wachovia is good news for their shareholders. It seems to combine the strengths of two very sound companies. And the fact that Wachovia is going to headquarter its retail brokerage operation in St. Louis is certainly very good news. St. Louis has the largest concentration of financial services/brokerage firms anywhere in the country outside of Wall Street.
We’ll have to see what impact that has on the number of jobs here but, in general, it sounds like things are going to turn out OK. Changes that make local employers stronger national players tend to be good news for St. Louis in the long run.
It is important to remember that national and international mergers like this one are really beyond our region*s control. St. Louis companies like AB buy smaller companies in other places and out of town companies like Wachovia buy smaller companies here and elsewhere.
This reality is the reason the City really focuses its attention these days on attracting and growing small and medium sized businesses, startups, and entrepreneurs and helping existing businesses expand. Doing that doesn’t make as many headlines as when St. Louis companies buy someone or get bought themselves, but it allows us to offset the losses of national companies.
For instance, LarsonAllen is moving to the City and planning for growth. The Lawrence Group and Gateway EDI were just named by the St. Louis Business Journal as two of the fastest growing companies in the region. These companies are just a few of the region’s businesses that may not be household names, but they are the real backbone of our economy. And CET is nurturing other new business at a very quick pace.