Wells Fargo to pay Citi $100 million over Wachovia

Wells Fargo to pay Citi $100 million over Wachovia

NEW YORK | Fri Nov 19, 2010 2:07pm EST

NEW YORK (Reuters) - Wells Fargo & Co (WFC.N) will pay Citigroup Inc (C.N) $100 million to settle a legal dispute over the contentious 2008 purchase of Wachovia Corp, closing another chapter of the receding financial crisis, the companies said on Friday.
The agreement, which the companies said would settle all claims related to the dispute, resolves a long-running feud stemming from the crisis.

Citigroup agreed in September 2008 to buy much of Charlotte, North Carolina-based Wachovia for $2.16 billion, with the Federal Deposit Insurance Corp sharing in losses on Wachovia loans. The subsequent higher offer by San Francisco- based Wells Fargo for all of Wachovia did not require FDIC support.

The failed bid was one of the last straws for the then-struggling Citigroup, which soon was forced to accept three U.S. government bailouts in 2008 and 2009. By buying Wachovia, Citigroup would have been able to expand its relatively small U.S. retail branch network to compete with larger rivals Bank of America Corp (BAC.N) and JPMorgan Chase & Co (JPM.N).

In July 2009, a federal judge rejected Citigroup's argument that Wachovia lacked the authority to accept Wells Fargo's offer, but Citigroup continued to seek damages