Citi vs. Wells Fargo: The Battle for Wachovia


Summary: On October 3, 2008, Wachovia agreed to be bought by Wells Fargo for about $14.8bn in an all stock transaction. This news came four days after the FDIC attemped to have Citigroup buy Wachovia for $2.1bn. Citigroup has protested Wachovia's agreement to sell itself to Wells Fargo and has threatened legal action over the matter. However, the deal with Wells Fargo is expected to overwhelmingly win shareholder approval as it values Wachovia at about 7 times what the Citigroup deal valued Wachovia. Citigroup alleges that they had an exclusivity agreement with Wachovia which barred Wachovia from negotiating with other potential buyers. Citigroup and Wells Fargo had entered into negotiations brokered by the FDIC to reach an a solution to this conflict of interest, but these negotiations failed. While Citigroup is no longer attempting to block the merger, they have indicated they will seek damages of $60B for breach of an alleged exclusivity agreement with Wachovia. Regardless, this marked a big merger in the investment banking industry, as Wells Fargo expanded their country-wide reach to the east coast, and gained many commercial banking deposits.

Useful Links & Resources:

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License