Wells Fargo & Co.s $15.1 billion purchase of Wachovia Corp., Charlotte, N.C., would create a potential money management heavyweight with about $600 billion in client assets under management.
A transaction overview released today by Wells Fargo, titled A Superior Deal for Shareholders, emphasized the mutual fund side of the deal. According to the San Francisco-based financial services giant, it had $151.3 billion in mutual fund assets as of June 30, while Wachovias Evergreen Investments subsidiary had $107.1 billion.
Evergreen had $246 billion in total assets under management as of June 30, said spokeswoman Laura Fay $120 billion in mutual funds, $94 billion in institutional separate accounts and $32 billion in high-net-worth accounts.
Jessica Mann, a spokeswoman for Wells Capital Management, Wells Fargos institutional asset management arm, said Wells Fargos combined institutional and retail AUM came to $336 billion as of Dec. 31, 2007. She said Wells Capitals AUM as of June 30 came to $237 billion, but that figure includes a chunk of assets the firm subadvises for the Wells Fargo Advantage Funds.
Aaron H. Dorr, managing director of asset management with investment bank Jefferies Putnam Lovell, New York, said Wells Fargo likely will be eager to keep Wachovias money management operations, adding scale and additional products to its existing business. But significant overlap in fixed income and elsewhere could make talent retention a challenge as it weaves the two together, he said.
Neither spokeswoman would comment about the prospects for how a deal might affect the two asset management units.
Also today, New York-based Citigroup Inc., which had announced an agreement earlier in the week to buy Wachovias banking operations, released a statement saying the Wells Fargo-Wachovia agreement was a clear breach of an exclusivity agreement between Citi and Wachovia. Citi demanded that Wachovia and Wells Fargo terminate their transaction.