NEW YORK (
$100 million to settle litigation regarding Wells Fargo's acquisition of
in late 2008.
The two financial institutions issued a joint release Friday in which they said: "We are pleased to announce the resolution of the litigation between Citigroup Inc. and Wells Fargo & Co. relating to the acquisition of Wachovia Corp. in October 2008. Wells Fargo will pay Citigroup $100 million in settlement of all claims related to this dispute. We are glad to put this matter behind us and we look forward to our two institutions working together constructively in the future."
Wells Fargo and Citi have been in a legal tussle over the last two years over the San Francisco-based bank's takeover of Wachovia.
Citi, in September 2008, had agreed to take over Wachovia's banking operations for $2.16 billion, or about $1 a share, with the
Federal Deposit Insurance Corp.
agreeing to take on potential losses in Wachovia's loan portfolio. Just one week later, Wells agreed to purchase all of Wachovia without FDIC assistance, in a deal totaling originally as much as $15 billion.
Wells ultimately won the bid, and Citi sued the bank for "breach of contract" on an exclusivity agreement, it had said at the time.
No matter how it's sliced, Wells Fargo was clearly the better suitor for doomed Wachovia, which tripped over its pick-a-pay mortgages. In November 2008, Citi itself ended up getting two massive injections from the federal government totaling $45 billion. Despite, Citi's impressive recovery, the government still owns roughly 10% of its common stock.
Friday's settlement puts the litigation behind both companies.
Citi shares were trading down 1.1% to $4.26. Wells Fargo shares fell 0.2% to $27.47 on Friday.
-- Written by Laurie Kulikowski in New York.
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