New York: Wells Fargo's  $11.7-billion acquisitionj of Wachovia has received approval from federal anti-trust regulators, closing a week-long chapter in the battle between Wells Fargo and Citi to acquire the troubled Charlotte, North Carolina based bank .

The clearance comes close on the heels of Citi's decision to abandon efforts to acquire Wachovia. However, the Long Island-based Citigroup said it would continue to press a lawsuit seeking over $60 billion from Wells Fargo and Wachovia for striking a deal after Wachovia agreed to negotiate exclusively with Citigroup. (See: Citigroup abandons fight for Wachovia; will press lawsuit against Wells Fargo) 

Citi had offered to acquire the banking business of Wachovia for $1 per share against the Wells Fargo offer of $7 per share for the whole enterprise, stunning Citi within four days of the latter's agrement to acquire Wachovia, by signing a deal to buy it for more than $16 billion.

Citi obtained a stay on Saturday afternoon from the New York Supreme Court, restraining Wachovia from going ahead with the competing bid from Wells Fargo, which was overturned by a New York state appeals court last night as Wachovia obtained a restraining order preventing Citi from interfering with its deal to sell the entire company to Wells Fargo.

However, the Long Island-based Citigroup said it would continue to press a lawsuit seeking over $60 billion from Wells Fargo and Wachovia for striking a deal after Wachovia agreed to negotiate exclusively with Citigroup.

For Wells Fargo, the deal will exponentially multiply its franchise east of the Mississippi River, allowing it an almost instant coast-to-coast network of around 12,200 branches. That network would be larger than the ones that rivals Bank of America and JPMorgan Chase have, and the combined Wells Fargo – Wachovia entity would have around $1,420 billion in assets and $787 billion in deposits.

Additionally, the economical cost of the acquisition and the tax benefits that will accrue to Wells Fargo as a result of the deal could allow it to "manufacture earnings" that other banks can not do, over a prolonged and broader-based economic downturn than originally anticipated.

The Federal Trade Commission has included the deal on its list of transactions that received an "early termination" of their antitrust reviews.

Early termination refers to the completion of a review by the FTC or Justice Department, before the end of a 30-day period required under antitrust law.

Following the clearance, rating agency Standard & Poor's upgraded Wachovia Corp's credit rating. Another rating agency Moody's said it was mulling a similar upward revision after Citigroup threw in the towel in the battle to acquire Wachovia.

Standard & Poor's (S&P) placed Citigroup on review for a possible downgrade, on account of concerns about the Citi's exposure to further write-downs on assets that have been disrupted in the recent financial turmoil and risk in its consumer loan portfolio within the United States.

Moody's has put Wells Fargo's rating on negative watch, on account of integration risk related to the Wachovia acquisition, and risks stemming from the weak economic environment.