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Wells Fargo Wins Bid to Acquire Wachovia

Published 10/10/08 Dustin Ensinger - Print Article
E-mail - editor@economyincisis.org

The bidding-war-turned-legal-battle between Wells Fargo and Citigroup ended on Thursday after Citigroup dropped out of the running to acquire ailing bank Wachovia.

Wells Fargo made the higher offer of $11.7 billion, paving the way for a merger that will further concentrate America’s banking power in fewer hands.

Together, the two companies will have $1.4 trillion in assets, 280,000 employees and 48 million customers. Wells Fargo will now have a coast-to-coast presence allowing it to compete with banking giants JPMorgan Chase and Bank of America.

Originally, a deal between Citigroup was thought to be finalized until Wells Fargo stepped in. That’s when the legal wrangling began, resulting in two lawsuits, one of which Citigroup does not plan on dropping. The original deal was brokered by the Federal Deposit Insurance Company.

The Wells Fargo-Wachovia merger epitomizes the changing landscape of the banking industry, which likely will be dominated by a few giant banking institutions when the smoke clears.

Source The Wall Street Journal:

Wells Fargo & Co. won the battle for Wachovia Corp. as rival suitor Citigroup Inc. walked away from compromise negotiations because of worries about the quality of some of Wachovia's assets.

The move clears the way for Wells Fargo to proceed with the definitive agreement it reached with Wachovia last Friday. That deal, announced just four days after Citigroup thought it had won the battered Charlotte, N.C., bank, now is valued at about $11.38 billion.

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