Wells Fargo's buyout of Wachovia cleared

11 October 2008

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.