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Wells Fargo, Wachovia merger

Wells Fargo announces Wachovia merger

Bankrate reporter Leslie McFadden contributed this entry.

Yesterday I reported that Citigroup agreed to buy Wachovia's banking operations.
Today, Wells Fargo made the surprise announcement that the company would acquire Wachovia for $15.1 billion in stock, with no financial help from the FDIC. Wachovia apparently killed its original deal to sell its banking operations to Citigroup for $2.16 billion.

In response to the agreement between Wells Fargo and Wachovia, Citigroup issued a statement charging that Wachovia had violated their exclusivity agreement. According to the press release, "The Exclusivity Agreement provides, among other things, that Wachovia will not enter into any transaction with any party other than Citi, and will not participate in any discussions or negotiations with any third party. The Exclusivity Agreement also provides that the parties would be irreparably harmed by any breach of the agreement and that the remedy of specific performance of the agreement is appropriate."

The statement further ordered Wachovia to cease the transaction with Wells Fargo.

Wells Fargo spokeswoman Lisa Westermann had no comment. Regardless of who scores Wachovia, the advice for cardholders remains the same -- keep using your cards, pay your bills on time to the usual address until otherwise notified. Watch your mailbox for important correspondence from your new issuer.

-- Posted: Oct. 3, 2008

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