Citi walked away from its fight to buy Wachovia, clearing the way for Wells Fargo to acquire Wachovia, transforming Wells Fargo from a regional player focused on the West Coast to a national retail-banking powerhouse. Citi said it will no longer seek injunctive relief to block Wells Fargo but will pursue a $60 billion claim against Wells Fargo and Wachovia for breaching an agreement that gave it the exclusive right to negotiate with Wachovia. With Citi bowing out, Wells Fargo looks set to acquire Wachovia in a $11.7 billion all-share deal.
I like this deal; not only is it better for Wells Fargo and better for Wachovia shareholders and better for the taxpayer because of the lack of a FDIC backstop, I think it's also good for consumers to keep Wachovia banking operations integrated with the brokerage business.
About the only group this is not good for is Citi shareholders.
No comments:
Post a Comment