Wells Fargo To Acquire Prudential's Stake In Retail Brokerage JV

Published: 18-Dec-2009

To strengthen its core competencies and improve capital position going forward

Wells Fargo is all set to acquire UK-based insurance company Prudential's noncontrolling interest in their retail brokerage joint venture, which includes Wells Fargo Advisors, for $4.5 billion.

The purchase price for Prudential’s interest is based upon an agreement between the parties on the value of Wells Fargo Advisors (then known as Wachovia Securities) on January 1, 2008, prior to the contribution of the retail securities businesses of AG Edwards & Sons. Wells Fargo will acquire Prudential’s interest on or before December 31, 2009.

Wells Fargo Advisors is one of the direct retail customer-oriented businesses of the company, offering advice and customized investment products, taking care of the risk and return capacities of its customers. Hence, having a strong position in the firm is expected to strengthen the company’s core competencies, enabling it grow inorganically as well.

Howard Atkins, CEO of Wells Fargo, said: "We thank Prudential for being a strong partner as we built the third largest retail brokerage firm in the nation. Wells Fargo Advisors enhances and complements our customer-focused mix of businesses by offering outstanding investment products and advice. Wells Fargo considered the cost of Prudential’s put in the assumptions for the Wachovia merger and we are pleased to take this next step pursuant to the agreement between Wachovia and Prudential."

John Strangfeld, chairman and CEO of Prudential, said: "We are pleased to have reached an all-cash agreement with Wells Fargo for the settlement of our interest in the Wachovia Securities joint venture. The settlement will substantially enhance our capital position and financial flexibility going forward. I also wish to compliment Wells and Wachovia for helping to make this a smooth transition. We were very pleased with the management of our joint venture and we wish Wells all the best."

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