Posted on Wednesday, December 1, 2010
Wells Fargo says it has agreed to pay Citigroup $100 million to settle claims related to a dispute over Wells’ 2008 acquisition of Wachovia Corp.
Wells Fargo and Citi found themselves in a bitter tug-of-war over the troubled North Carolina lender when regulators stepped in to engineer a take-over of Wachovia ahead of the institution’s impending collapse from souring real estate loans.
Citigroup reached an agreement to buy certain Wachovia operations on September 28, 2008, in what the company thought was a done deal. Citi planned to pay $2.1 billion to acquire Wachovia’s retail bank, corporate, investment bank, and wealth management businesses.
But Wells Fargo swooped in just days later, offering $15.1 billion for the entire company. It didn’t take long for Citi to step aside, but it did so grudgingly.
Citi said Wachovia had signed an “exclusivity agreement,” barring it from entertaining other offers, and Citi subsequently filed a lawsuit with the New York State Supreme Court, accusing Wells Fargo and Wachovia of breach of contract and seeking $60 billion in damages.
Upon reaching the $100 million settlement, Citigroup and Wells Fargo issued a joint statement saying, “We are pleased to announce the resolution of the litigation between Citigroup Inc. and Wells Fargo & Co. relating to the acquisition of Wachovia Corp. in October 2008. We are glad to put this matter behind us and we look forward to our two institutions working together constructively in the future.” By: Carrie Bay DSNews.com