Wachovia-Citi-Wells Talks Collapse
Citi said moments ago that its takeover talks with Wells Fargo and Wachovia to split up Wachovia have collapsed.
Citi believed it had struck a deal to buy Wachovia, which turned around and signed a merger agreement with Wells Fargo. Lawsuits ensued. All parties agreed to stop suing each other earlier this week for a few days, given the market collapse, and try to talk out a solution in which Wachovia would be split between Citi and Wells.
But that attempt has failed, Citi said, at least for now. The banking giant said it is "willing to complete" the transaction, assuming it gets what it wants, presumably.
The parties could not agree on the structure of the transaction -- who would get what -- or its risks -- how much bad debt is in the mix.
In the Citi-Wachovia deal, Citi would get Wachovia's bank only, leaving Wachovia's brokerage as a standalone business. In the Wells-Wachovia deal, Wells would get everything.
Citi said it would resume its lawsuit against Wachovia but not ask a judge to stop the Wachovia-Wells merger.
"We did not seek the Wachovia transaction; Wachovia brought it to us," Citi chief executive Vikram Pandit said in a statement.
-- Frank Ahrens
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