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Wells Fargo Steps in With a Better Offer for Wachovia

This article was written by in Banking. 10 comments.


Although Wachovia was recently saved by Citi and the FDIC, Wells Fargo stepped into the picture with a better offer. In this deal, Wells Fargo would take on all of Wachovia, including deposits, brokerage, and investment management, for $15 billion. Earlier this week, Citi offered $2.2 for Wachovia’s banking operations only.

If the Wells Fargo deal goes through, and Citi will do everything in its power to attempt to stop that from happening, shareholders of Wachovia would receive about one-fifth a share in Wells Fargo for every share in Wachovia.

While Citi’s offer relied on the FDIC for financial assistance, Wells Fargo can go through with the transaction without help from the government. The FDIC, however, is in favor of the Citi’s deal.

The banking landscape continues to change.

Published or updated October 3, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 5 comments… read them below or add one }

avatar Green Panda

Why is the FDIC in favor of Citi’s deal? It sounds like Wells Fargo is the best deal for taxpayers.

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avatar Luke Landes ♦127,373 (Platinum)

I have the same question. The FDIC’s statement doesn’t elaborate. “The FDIC stands behind its previously announced agreement with Citigroup. The FDIC will be reviewing all proposals and working with the primary regulators of all three institutions to pursue a resolution that serves the public interest.”

FDIC Press Release

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avatar Banker

Guess what….all the Board of Directors and top management that got Wachovia in big time loan trouble going to Wells Fargo…..be careful what you wish for

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avatar kitty

@banker: Good point. I was considering buying Wells Fargo shares – not now, maybe if it drops a bit – but this is an interesting consideration. I think though the main reason Wachovia got into this mess was buying a lending company. Sure it was a stupid decision, but at least they weren’t the ones giving bad loans….

I have multiple deposits in Wachovia. This brunch is located very close to my home, and recently they had really good rates 4-4.25% on one year CD. I hope Wells Fargo keeps the branch and just changes the sign on the door as I really like people who work there.

I am surprised at FDIC supporting Citibank too. If I remember correctly, with Citibank’s deal, FDIC would’ve been on the hook on losses in excess of some amount. Not so with Wells Fargo. Maybe FDIC doesn’t like agreements to be broken. But if they didn’t have anything in writing…

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avatar vilkri

I use Wachovia. I have to change the bank though, if Citi takes them over. I have not forgiven Citi for turning me down when I applied for a credit card after I had lived in London for a couple years. Wells Fargo? I would stay with them. I would even like it. I always liked it that Wells Fargo has this old American bank aura about itself.

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