Wells Fargo wins Fed approval on Wachovia bid

Thank God that has been decided. What a roller coaster ride us depositors have had!

WASHINGTON (Reuters) - The Federal Reserve on Sunday gave its stamp of approval to the takeover of Wachovia Corp by Wells Fargo & Co of San Francisco, which had battled New York-based Citigroup for ownership of the wounded bank.

In an unusual Sunday afternoon announcement that appeared timed to precede the opening of shaky global financial markets, the Fed said it already had been in touch with the U.S. Department of Justice and banking regulators about the deal.

"Those agencies have indicated that they have no objection to the approval of the proposal," the Fed assured.

The fight between Wells Fargo and Citigroup over Wachovia, which is based in Charlotte, North Carolina, was acrimonious right up to the point when Citigroup finally backed out last Thursday.

It had drawn particular attention because it took place amid the frantic scramble by the U.S. government and regulators to devise ways for shoring up hard-pressed financial institutions, including through possible direct injections of capital into banks.

The Fed cited the "unusual and exigent circumstances affecting the financial markets, the weakened financial condition of Wachovia and all other facts" in its decision, saying it had shortened the usual notice period it generally gives regulators about such takeovers.

The deal could be completed in five days, the Fed said.

— Full Reuters story

PR: Wachovia Announces Bank Subsidiary Divestitures to Citigroup

From the Wachovia Website:

September 29, 2008
Wachovia Corporation to become a focused leader in retail brokerage and asset management.

CHARLOTTE, NC—Wachovia today announced intentions to sell its retail bank, corporate and investment bank and wealth management businesses to Citigroup. Wachovia Corporation will remain a public company with two main operating subsidiaries: Wachovia Securities, the nation's third largest brokerage firm, and Evergreen Asset Management, a leading provider of asset management services.

"During recent weeks, the financial landscape has changed significantly and presented us with unprecedented challenges," said Robert K. Steel, CEO and President of Wachovia. "Today's announcement is the best alternative for the company, enabling a resolution on the Golden West portfolio."

Under terms of the transaction, Citigroup will pay $2.1 billion to Wachovia and assume the senior and subordinated debt of Wachovia Corporation.

The transaction is expected to close before year-end. It has been approved by directors of both companies and is subject to shareholder approval of Wachovia and the appropriate regulatory approvals.

Customers of both companies should continue banking as usual, and feel confident that their deposits are secure. Also, employees and vendors should continue to operate business as usual.

At this time, there are no changes to Wachovia's board of directors and two Wachovia directors will join Citigroup's board.

Wachovia Corp. will remain headquartered in Charlotte, NC. Wachovia Securities will continue to be headquartered in St. Louis, MO. Citigroup will headquarter the retail bank in Charlotte and the investment bank in New York.

Wachovia's investment bankers were Goldman Sachs, Perella Weinberg Partners and Wachovia Securities, and its legal advisors are Sullivan & Cromwell and Simpson Thacher & Bartlett.

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About Wachovia
Wachovia Corporation (NYSE:WB) is one of the nation's largest diversified financial services companies, with assets of $812.4 billion and market capitalization of $33.5 billion at June 30, 2008. Wachovia provides a broad range of retail banking and brokerage, asset and wealth management, and corporate and investment banking products and services to customers through 3,300 retail financial centers in 21 states from Connecticut to Florida and west to Texas and California, and nationwide retail brokerage, mortgage lending and auto finance businesses. Globally, clients are served in selected corporate and institutional sectors and through more than 40 international offices. Our retail brokerage operations under the Wachovia Securities brand name manage more than $1.1 trillion in client assets through 14,600 financial advisors in 1,500 offices nationwide. Online banking is available at wachovia.com; online brokerage products and services at wachoviasec.com; and investment products and services at evergreeninvestments.com.

Citigroup buying Wachovia banking operations

FDIC says Wachovia didn’t fail, and that all depositors will be protected.

NEW YORK - The government said Monday that Citigroup will acquire the banking operations of Wachovia in a deal facilitated by the Federal Deposit Insurance Corp.

The FDIC says Wachovia didn’t fail, and that all depositors are protected and there will be no cost to the Deposit Insurance Fund.

The sale of Wachovia Corp. comes just days after the government’s seizure of Seattle-based Washington Mutual Inc. — the largest bank failure in U.S. history.

— Full MSNBC Story