Wells Fargo to pay Citi $100 million to settle Wachovia acquisition
Wells Fargo(WF) will pay Citigroup (C) $100 million in a settlement of all claims related to the acquisition of Wachovia Corp., the companies said Friday. Citigroup was selected() to purchase Wachovia in 2008, as the Charlotte, N.C.-based bank was on the verge of failing from the troubled real estate loans on its balance sheet. The deal called for extensive absorption of Wachovia's losses by the federal government. However, in October 2008, Wells Fargo trumped the Citi deal by offering to pay roughly $15 billion to acquire Wachovia. According to Bloomberg, Citi originally offered $2.2 billion for the acquisition. Citigroup and Wachovia reportedly signed an "exclusivity agreement" saying that Wachovia couldn't negotiate a deal with any other party, according to The Wall Street Journal. Therefore, when Wells Fargo came into the picture, Citigroup accused the bank of breaching the terms of its agreement with Wachovia. The $100 million settlement resolves all claims from the deal. "We are glad to put this matter behind us and we look forward to our two institutions working together constructively in the future," both companies said. Write to Christine Ricciardi. Disclosure: The author holds no relevant investments.