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On September 29, in a deal orchestrated by federal regulators, Citigroup Inc. ("Citigroup") agreed to purchase ailing Wachovia for approximately 2 billion dollars. On October 3, Wells Fargo & Co. ("Wells Fargo") announced an agreement to acquire Wachovia for approximately 15 billion dollars. The substitution of Wells Fargo for Citibank after the original deal was announced, combined with the dramatic increase in acquisition price, stunned observers and has Citigroup scrambling to block the new agreement. Wells Fargo's late, increased offer for Wachovia appears to lack consistency with their prior stance in takeover negotiations, however, Wells Fargo's offer was most likely adjusted to reflect a recent change in the tax law. On September 30, one day after the original agreement with Citibank was announced, the Treasury... [read full story]
