Friday, October 03, 2008

UPDATE: Wachovia Sold To Wells Fargo

The Atlanta Journal-Constitution reports that Atlanta’s second-largest bank, Wachovia Corp., has changed dancing partners and will now be sold to Wells Fargo for $15.1 billion. It was reported earlier in the week that the sale was to be with Citigroup.

Citigroup was only going to take over the banking operations, the deal with Wells Fargo is a complete merger of the two banks.

Wells Fargo, whose biggest stakeholder is billionaire Warren Buffett's Berkshire Hathaway Inc., said its offer keeps Wachovia intact and needs no U.S. assistance. Citigroup's bid of $2.16 billion on Sept. 29 for Wachovia's banking businesses - valued at about $1 share - relied on help from the Federal Deposit Insurance Corp. and left out the securities brokerage and Evergreen mutual-fund units.

Wachovia has been among the banks hardest hit by the ongoing crisis in the mortgage market. Its current problems stem largely from its acquisition of mortgage lender Golden West Financial Corp. in 2006 for roughly $25 billion at the height of the nation’s housing boom. With that purchase, Wachovia inherited a deteriorating $122 billion portfolio of Pick-A-Payment loans, Golden West’s specialty, which let borrowers skip some payments.

Read the article about Wachovia's merger here.

Read the article about Wachovia's merger here.

Read the article about Wachovia's merger here.

plez sez: it looks like wells fargo offered a sweeter deal.

the deal with citigroup was announced earlier this week.

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