Charlotte, N.C.-based Wachovia says it agreed to be acquired by San Francisco-based Wells Fargo & Co. in a $15.1 billion all-stock deal. However, New York-based Citigroup now demands that Wachovia abide by the terms of its earlier deal to acquire Wachovia's banking operations.
According to the Citigroup, its agreement with Wachovia provides that Wachovia will not enter into any transaction with any party other than Citigroup or making agreement with anyone else.
The Citigroup deal would have been done with the help of the Federal Deposit Insurance Corp., but the Wells deal would be done without it. According to the head of the FDIC, the agency is standing behind the agreement it made with Citigroup. Well, the clash sets up a battle over who will win Wachovia.
Related post: Citigroup’s Financial Bet on Wachovia Banking Operations
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