Citi and Wells Fargo negotiations rumble on

Natalie Holt
10-Oct-2008
Citigroup and Wells Fargo are still trying to broker a deal on which firm gets to acquire US bank Wachovia.
The beginning of last week saw Wachovia and Citi agree a government-backed $2.16bn deal in exchange for Wachovia’s banking operations. But this was then trumped by a later deal from rival bidder Wells Fargo, which offered $15.1bn for the troubled bank.

Citi’s response was to threaten legal action, but it appears that Citi and Wells Fargo have reached a truce.

A statement from the Federal Reserve today says: “The Federal Reserve acknowledges the considerable efforts of Citi and Wells Fargo to reach an accord regarding the acquisition of Wachovia.

“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.”

It adds: “The Federal Reserve will immediately begin consideration of the filings submitted by Wells Fargo for approval to acquire Wachovia.”