It appears that
Wells Fargo & Co. will be buying Wachovia Corp. for $15.1 billion -- not that Citigroup Inc. is going away quietly. In a
press release, Citi says it plans to follow through with its $60 billion breach of contract suit. But that's a story for another post.
For now, let's take a look at how Wells Fargo and Wachovia match up and what that might mean for integration.
This map put together by the Charlotte Observer is a good illustration of where the banks overlap. Between them, the banks have a presence in nearly every state and overlap in only six. That could limit the number of branch closings that result from the merger. That both banks are anchored in retail banking should make training employees to cross-sell products easier, too.
The most complicated integration piece could be getting the banks operating on a single technology platform. As Ken Klee pointed out on Thursday, one of Wachovia's greatest assets -- along with its $448 billion in low-cost deposits -- is the IT platform that provides the bank a
unified view of customer relationships across its banking and brokerage businesses. Wells Fargo must decide whether to adopt the system across the combined organization, ditch it for its own IT platform or implement some combination of the two. Whatever it decides, the implementation must be done with as little customer disruption as possible. Otherwise it could send skittish customers packing.
Despite the lack of geographic overlap, there will be job cuts. Wells Fargo has said it will cut expenses of the combined bank by $5 billion by 2010. Still, the folks in Charlotte are celebrating the outcome of this bank battle. They've been rooting hard for the San Francisco bank to triumph, thinking it would result in fewer job cuts than the Citi deal. Wachovia employees some 20,000 locals, and Wells Fargo has said it will make Charlotte the headquarters for its
East Coast banking operation.
Of course, after the turmoil of the past two weeks, there's lots of dust that has to settle before integration specifics are addressed.
- Suzanne Stevens
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