The Federal Reserve's board of governors on Sunday approved Wells Fargo's $11.7 billion purchase of Wachovia, removing the last key regulatory hurdle for the deal.

On Friday, federal antitrust regulators backed the acquisition by San Francisco-based Wells Fargo of Wachovia.

Citigroup had initially offered to buy the Charlotte, North Carolina-based bank for $2.1 billion in a deal brokered by the Federal Deposit Insurance Corp. Days later, the board of Wells Fargo agreed to an all-stock offer worth $11.7 billion.

Citigroup walked away from the deal on Thursday, but is still seeking $60 billion in damages for breach of contract.

The Federal Reserve released a statement announcing the approval of the deal, which includes Wachovia's banking business and all other units. Wachovia shareholders must now approve the deal.

By Stephen Huebl
©CEP News Ltd. 2008