If you currently bank with Wachovia, you may already know that your bank has become a subsidiary of Wells Fargo. Since buying Wachovia in December 2008, Wells Fargo has been gradually implement a re-branding strategy to help customers understand and adjust to the merger more smoothly.
Wells Fargo Buys Wachovia
During the financial crisis of 2007, Wachovia’s stability was deemed too vulnerable to withstand the growing economic pressure alone and thus needed a buyer to step in to save them. Their exposure to the subprime mortgage market put them at risk. The $15.1 billion transaction did not go through without any heat, however, as Citigroup had all but closed its initial plans for a Wachovia merger of its own before getting swooped by Wells Fargo at the last minute.
Citigroup, at the time, had been providing Wachovia with the funds it needed to remain open for business and believed that it would be able to purchase the bank on the cheap at $2.1 billion. That translated to $1 per share of Wachovia. Wells Fargo beat Citigroup’s bid by a whopping $13 billion.
What Next For Wachovia Customers
Things have since cooled with Wells Fargo agreeing to pay $100 million in settlement with Citigroup for their alleged role in blocking the Citigroup and Wachovia merger. While $100 million may be a lot of money, it is significantly less than the ridiculous $60 billion asking price Citigroup was seeking two years ago.
Founded as Wachovia National Bank in 1879, the company at its peak was the fourth largest bank in the nation, growing through a series of mergers and acquisitions along the way.
Current customers of both Wachovia and Wells Fargo that will be banking at any of the 11,000 locations around the country, do not have to worry about the financial health of their institution. The process of converting all Wachovia locations to Wells Fargo stores will be a gradual and steady process. Recent states that have been converted include Kansas and Texas, with Alabama, Georgia, Mississippi, and Tennessee planned for the fall of 2011.
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