JPMorgan to Buy Bear for $2 a Share

JP Morgan says the all-stock deal has received the required approvals from the federal government and the Federal Reserve.

The Fed will provide special financing to JPMorgan Chase in connection with the deal. The central bank has agreed to fund up to $30 billion of Bear Stearns' less liquid assets.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

NEW YORK (AP) Bear Stearns and JPMorgan Chase & Co. were close to an emergency buyout deal Sunday night aimed at averting further panic in the financial markets.

Top executives from both companies were in 11th-hour talks about a deal that could sell Bear Stearns for a per share price that is likely to be "considerably less" than the $30 the stock closed at Friday, according to The Wall Street Journal.

Bear Stearns shares closed down $27, or 47.4 percent, to $30 on Friday as investors worried about a possible failure of the investment bank. The drop wiped $5.7 billion from the company's market value. JPMorgan shares fell $1.57, or 4.1 percent, to $36.54 on Friday.

Both sides were in a rush to complete a deal before financial markets opened in Asia for Monday morning trading, amid fears that a crisis of confidence could roil the system further, according to sources close to the talks who were not authorized to comment on the record.

Ahead of Tokyo's open, concerns about the credit crisis taking a new, more dangerous turn began to emerge in overseas markets. New Zealand shares opened sharply lower in overnight trading, tracking financial sector-driven weakness on Wall Street and signaling a potential sell-off in Asian markets.

Analysts on Wall Street say the bid to rescue Bear Stearns was more than just saving the nation's fifth-largest investment bank. Instead, keeping Bear Stearns afloat even if it is sold off was really propping up both the U.S. economy and global financial system.