inally! Wachovia Corp. and First Union Corp. have completed their merger and SunTrust Banks Inc. is left sitting on the sidelines - but still is trying to get into the game.

On Aug. 3, 2001, Wachovia announced that its shareholders have approved the $14.3 billion merger with First Union by a significant margin, thus rejecting SunTrust's $15.1 billion bid.

"We would concede they have won. We would not agree it was a significant margin. It was a slim margin," said SunTrust vice chairman Ted Hoetner. "SunTrust will drop its merger effort and won't challenge the vote results or wait for the official tabulation, which could take weeks. This closes this chapter, and we are moving on."

Wachovia and First Union are free to move on to the next stage, which promises to be a series of tactical maneuvers by each company to assure Wall Street, their stockholders and customers that the industry's most watched merger in several years isn't already weakened.

Since April 2001, when Forbes first reported that the fight for Wachovia had begun, we have been following this significant acquisition. Back then, things looked a little different. The winner appeared to be SunTrust.

On May 14, SunTrust made its unsolicited bid for Wachovia. At that time, Wachovia's board of directors had approved the First Union bid but had not yet voted, so SunTrust stepped right in with an all-stock acquisition offer.

"On financial terms, SunTrust's is a better offer," said analyst George Baker, who follows Wachovia for Deutsche Banc Alex. Brown.

First Union Chairman G. Kennedy Thompson responded, "We have a binding legal agreement with Wachovia that we intend to vigorously pursue to consummation."

On May 22, Wachovia's board rejected SunTrust's hostile offer. "Five months after our discussions broke down, SunTrust is back with a less appealing, hostile proposal to take over Wachovia, and our conclusion is the same: It will not work," said L.M. Baker Jr., Chairman and Chief Executive Officer of Wachovia.

SunTrust made preliminary filings with the U.S. Securities and Exchange Commission, allowing it to take the issue directly to Wachovia shareholders in a proxy fight. SunTrust asked shareholders to vote against First Union's bid and send a message to the board of directors that they want it to work with SunTrust's offer.

Wachovia and First Union both filed actions in state court in North Carolina seeking a declaration that SunTrust could not invalidate the stock- option agreements entered into by Wachovia and First Union.

In that litigation, Wachovia also sought to enjoin SunTrust from continuing to use information illegally obtained by SunTrust in breach of its confidentiality agreement with Wachovia. First Union sought to enjoin SunTrust from violations of unfair and deceptive practices and unlawful interference with prospective economic advantage under North Carolina state law.

SunTrust submitted its proposal on June 4, but on June 19 Wachovia announced that it had received antitrust clearance from the U.S. Federal Trade Commission for the First Union merger.

Despite the Aug. 3 vote, the drama isn't over yet. In a recent article in the Washington Post, Krissah Williams reported, "SunTrust Banks Inc., having lost to First Union Corp. in the battle for Wachovia Corp., says it is now focusing on stealing customers from the newly merged bank."

"We fully recognize that the Wachovia-First Union merger integration could make for a lot of unhappy Wachovia customers who will find SunTrust attractive," said SunTrust spokesman Barry Koling. "Our eyes are always open for merger opportunities. We never needed the Wachovia acquisition."

In SunTrust's June 30 quarterly report filed with the Securities and Exchange Commission, it said that it recorded $7.5 million in costs for legal and consulting fees and is planning to seek about $30 million in expenses in the third quarter directly as a result of its failed bid to acquire Wachovia.

First Union and Wachovia, meanwhile, now turn their focus toward making a smooth transition into the nation's fourth-largest bank.