Wells Fargo buys Wachovia

[Trielelvan]

... and Citigroup wants to sue, but Wells Fargo says the previous contract is unenforcable and asks to have the pact voided.

Whole article here: http://www.reuters.com/article/ousiv/idUSTRE49D7H320081014

San Francisco-based Wells Fargo agreed on October 3 to buy Charlotte, North Carolina-based Wachovia in an all-stock takeover originally valued at $15.1 billion.

Four days earlier, New York-based Citigroup had agreed to pay $2.16 billion for Wachovia's retail and investment banking units, but not its brokerage or asset management arms.

That agreement also called for Citigroup to absorb up to $42 billion of loan losses from Wachovia, which has been hurt by exposure to mortgages. The Federal Deposit Insurance Corp would have absorbed further losses in exchange for $12 billion of Citigroup preferred stock and warrants.

Considering Wells Fargo is wanting to do a total buyout with no government help, I think Citigroup is screwed.
Going to be interesting to see how this pans out.

[Diekan]

Last I heard WF was going to *take* the Wachovia's in the southern states and Citi was *getting* the Wachovia branches in the north easter states.

[Trielelvan]

More on that here: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/14/BUVB13GP51.DTL&tsp=1

Under Citigroup's earlier $2.16 billion offer for Wachovia's banking subsidiaries, the New York bank agreed to be responsible for the first $30 billion of losses on a $312 billion portfolio of mortgages and other assets, with the Federal Deposit Insurance Corp. providing protections beyond that cap. Citigroup walked away from its bid late last week, after negotiations over a potential deal to split Wachovia with Wells failed.

Looks like they tried to do that, but it didn't go through and they aren't trying to split it again. Now they're just suing, and so is Wells Fargo.

This, however, is a little disturbing...

Hammond did confirm that Wells is one of the nine banks participating in the Treasury program, which could ultimately direct up to $250 billion from the federal bailout package to thousands of financial companies. He didn't disclose the amount involved, but the Wall Street Journal reported the Treasury plans to buy $20 billion to $25 billion worth of Wells preferred shares.

It's unclear whether the bank was pressured to sell a stake to the government, what conditions may be attached to the funds and why Wells of all companies received a federal injection, said Bart Narter, senior vice president with the banking group of the Boston research firm Celent.

I dunno about anyone else, but that earlier post in here regarding the crashing of the US dollar combined with this info makes me a little jittery... the idea that the govt forced Wells Fargo to "accept" the aid so that they would be justified in buying $20-25 billion worth of shares is disquieting. Something stinks.

[Ginzburgh]

Chase bought WaMu too. A lot of banks are going to start getting bought out by bigger banks.

[Tossica]

Hopefully soon everything will be owned by one company and we'll finally see Blade Runner come true.

[Drem]

shinra co. inc

[leah]

shinra co. inc

hah, awesome!

[Iccarra]

No comment.

[brinstar]

so why am i still paying ATM fees

[Harrison]

I've always fucking wondered why I need to pay money, to use my money...

[araby]

Be careful with this, for this reason. I've had several conversations with folks who are receiving outstanding bills for something late, like a cell phone or credit card bill, and after HOURS on the phone with the bank, the company, and even three-way calls between the two, they finally realized that in the buy-out or merge of the companies, the payments were simply lost.

I know there are a lot of people that pay very close attention to their bank statements, credit card and cell phone bills, keep their records and KNOW for sure when they are not wrong. There are others that do not want to fight on the phone for over an hour, don't have the daytime hours for that or simply assume they probably screwed up and give in to pay what they're asking.

Don't let that happen to you in all these merges.