Wachovia to be Bought by Wells Fargo

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Wachovia to be Bought by Wells Fargo

Posted on October 3, 2008 by paradigmdefault

Dick Kovacevich, chairman of Wells Fargo

Wachovia agreed to sell itself to Wells Fargo in a $15.4 billion takeover, scrapping a federally backed deal Citigroup put together. Citigroup is considering suing the banks and may sweeten its bid.

A federal takeover of Wachovia which included Citigroup, Inc. was undone Friday as Wells Fargo & Co. slid in to make a powerful offer. The upsides of this arrangement versus the Citigroup arrangement are:

Wachovia remains whole
A higher price is being offered (less debt to write off)
US taxpayers aren’t hit with the damage

Citigroup is not taking this laying down, however. Those familiar with Citigroup say that the company has been pumping money into Wachovia already and intend to sweeten the deal later this week to secure it’s deal.

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