Wells Fargo Corporation, which is one of the largest institutions in the U.S., has agreed on a fifteen billion dollar merger with Wachovia bank that is expected to be a fruitful venture. The merger was completed and was effective as of December of 2008. The plan to convert Wachovia Banks into Wells Fargo banks is one that has been in the works for the past three years. Wells Fargo proudly announced on May 17, 2011 that it expects to finish converting the remaining Wachovia branches to Wells Fargo branches by mid-October of this year.
Wells Fargo combined with Wachovia will have over 1.42 trillion dollars in assets, $787 billion dollars in deposits, and 258 billion in mutual funds That is a lot of paper. The alliance will also have 48 million customers and employ 280,000 employees. The number of Wells Fargo-Wachovia ATMs will jump to 12,227 and there will be a total of 10,761 locations which makes this the biggest merger within the banking industry.
The merger creates a very promising value proposition for team members, customers, communities, and all the shareholders. Wells Fargo CEO John Stumpf noted that there is high probability of further market share growth. Customers can also benefit from the convenience of having more locations to service them and shorter distances between locations.
With Wachovia, Wells Fargo now has customers in states such as Alabama, Connecticut, Delaware, Florida, Georgia, Kansas, Maryland, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia and Washington D.C. This is quite a huge expansion for Wells Fargo.
The shareholders will maximize their investments with the predicted rise market value. Employees will be able to reap more benefits from the combined company. People within the communities will be able to have more job opportunities as positions open in the new branches and some of the existing branches. Both Wells Fargo and Wachovia can proud as will have become the leading source of financial services in the United States.
It sounds like a win-win situation for both Wachovia and Wells Fargo. Before the merger Wachovia was having troubles. Its profits had fallen 10% in the third quarter of 2007 and they had lost a total of 1.3 billion dollars in write-downs and related to credit market issues. The company also quadrupled its loan loss and predicted increasing future credit troubles.
Initially Wachovia had gone to Citgroup for assistance, but Wells Fargo showed them the money.