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Home >> Keeping Your Money Safe
Wachovia to Merge with Wells Fargo
Dispute with Citigroup Resolved, for Now
On Monday, September 29, 2008, the Federal Deposit Insurance Corporation (FDIC) issued a press release announcing that Citigroup Inc. would acquire the banking operations of Wachovia Corporation, Charlotte, North Carolina, in a transaction facilitated by the Federal Deposit Insurance Corporation and concurred with by the Board of Governors of the Federal Reserve and the Secretary of the Treasury in consultation with the President. No uninsured deposits would be lost as a result of the transaction, and there was expected to be no cost to the Deposit Insurance Fund. Wachovia did not fail; rather, it would be acquired by Citigroup Inc. on an open bank basis with assistance from the FDIC. |
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Citigroup Inc. would acquire the bulk of Wachovia's assets and liabilities, including five depository institutions and assume senior and subordinated debt of Wachovia Corp. Wachovia Corporation will continue to own its AG Edwards and Evergreen investment subsidiaries.
Note: Wachovia and Wells Fargo & Company announced later (October 3, 2008) that they had signed an agreement to merge their operations in an arrangement that would not require government assistance. Citigroup is challenging that agreement and federal regulators have not resolved the issues involved in the dispute over which partner, Wells Fargo or Citigroup, will ultimately prevail.
Update: Thursday afternoon, October 9, abandoned negotiations for a compromise with Wells Fargo and cleared the way for a Wells Fargo - Wachovia combination. Citigroup may still sue to recover damages from the other two organizations. On October 12, 2008, the Federal Reserve Board issued its approval of the acquisition by Wells Fargo.
Published on BankingQuestions.com 9/29/2008
Last Updated 10/15/08
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