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Deals & People December 4, 2008
Prudential Will Sell Stake in Wachovia Securities
Newark-based insurance company Prudential Financial today said it plans to sell its minority stake in Wachovia Securities to Wells Fargo.
Reported by Alison Cooke
In 2003, Prudential and Wachovia combined their retail brokerages under Wachovia Securities, giving Prudential a 38% stake, and Wachovia retaining the majority 62%.
According to published reports, that stake is worth $5 billion, or more than $3.7 billion after taxes, and a sale could result in a $1.7 billion after-tax gain. However, the deal is not expected until January 1, 2010, the company noted in a filing with the Securities and Exchange Commission.
Upon completion of the deal, Wells Fargo would have full ownership of the Wachovia Securities brokerage business, with 14,635 brokers and $1 trillion of client assets. Wells Fargo announced it would purchase Wachovia in October (see “Wachovia Leaves Citigroup at the Altar“).
The reports also said that Prudential has applied for capital through the U.S. Treasury Department’s $700 billion Troubled Asset Relief Program (TARP). However, the company said the government has not yet decided about its request.