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Citi walks out of Wachovia deal; paves way for Wells Fargo

Citi walks out of Wachovia deal; paves way for Wells Fargo
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First Published: Fri, Oct 10 2008. 02 25 PM IST
Updated: Fri, Oct 10 2008. 02 25 PM IST
PTI
New York: Global financial giant Citigroup today said it has decided to walk away from a deal entailing acquisition of Wachovia, paving way for rival Wells Fargo to acquire the troubled American bank for about $15 billion.
“We are proud to have been part of an historic transaction that was supported by all of the federal banking agencies and the Secretary of the Treasury, after consultation with the President, and that we carefully designed to avoid systemic stress and to advance interests of our shareholders,” Citigroup said in a statement.
No agreement has been reached with Wells Fargo following several days of discussions about matters relating Wachovia, Citigroup said adding that the dramatic differences in the parties’ transaction structures and their views of the risks involved made it impossible to reach a mutually acceptable agreement.
The battle between financial giants Citigroup and Wells Fargo began after Wachovia dumped the $2.2 billion deal with Citi in favour of a better offer from Wells Fagro.
Earlier on 29 September, regulator FDIC has facilitated Citigroup’s acquiring banking operations of Wachovia.
However on 3 October, Wachovia had announced a new deal entailing its merger with rival Wells Fargo in an all- stock transaction worth about $15.1 billion.
Meanwhile in a statement, the Federal Reserve today said it will immediately begin consideration of the filings submitted by Wells Fargo for approval to acquire Wachovia.
The Fed has acknowledged efforts of Citi Group and Wells Fargo to reach an accord regarding Wachovia acquisition. While no agreement between Wells Fargo and Citi was reached, the two parties have indicated that they will no longer seek injunctive relief to prevent a transaction.
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First Published: Fri, Oct 10 2008. 02 25 PM IST