Rebirth of England.

Chapter 630: Initial Layout
Wachovia was once the fourth largest bank in the United States, headquartered in Charlotte, North Carolina. In 2007, its total assets reached $7830 billion.

The financial crisis caused by the subprime mortgage crisis caused many banks to run into operational difficulties, including Wachovia.

The bank that was originally planning to acquire the bank was not Wells Fargo, but Morgan Stanley. As early as the end of August this year, there were reports that Morgan Stanley was considering a merger with Wachovia and several other banks.

Then on September 9, Citigroup joined in and announced that it had reached a principle acquisition agreement with Wachovia, the former fourth largest commercial bank in the United States, with the assistance of the Federal Deposit Insurance Corporation (FDIC). Citigroup agreed to acquire Wachovia's banking business for US$15 billion in stock, including assuming Wachovia's US$21.6 billion in liabilities.

At that time, Citigroup's acquisition of Wachovia had been approved by the boards of directors of both parties, but the final agreement still needed to be voted on by Wachovia's shareholders, with the deadline being December 2008, 12.

Just when the market generally believed that Citigroup's acquisition of Wachovia was inevitable...

On October 10, Wells Fargo suddenly announced that it would acquire Wachovia for US$3 billion in a stock swap.

After completing the acquisition of Wachovia, they will invite three directors of Wachovia to join the board of directors of Wells Fargo and issue new shares worth a total of US$200 billion to raise funds.

According to information obtained by Barron's, Wells Fargo joined the pursuit of Wachovia only after learning of Citigroup's acquisition plan.

It is worth mentioning that the Federal Reserve issued a public statement on October 10rd noting Wells Fargo’s new proposal - the statement indicated that Wells Fargo’s proposal has not yet been reviewed and that regulators will strive to achieve results that protect all Wachovia creditors and promote market stability.

The statement also noted that Citigroup's proposal is under review by the Federal Reserve and the OCC.

On October 10, Citigroup, which was "poached", filed a lawsuit against Wachovia and Wells Fargo in anger, seeking a temporary restraining order, preliminary and permanent injunction relief, specific performance of the exclusive agreement, and punitive damages.

But on October 10, Wachovia was not afraid at all. It filed a motion for a temporary restraining order to prevent Citigroup from taking any measures to interfere with the implementation of the merger agreement between Wachovia and Wells Fargo.

Concerned that Citigroup and Wells Fargo's competing legal claims could themselves have a destabilizing effect on those institutions, Wachovia, and the banking system as a whole, Federal Reserve representatives sought to facilitate negotiations among Wachovia, Citigroup, and Wells Fargo to resolve their differences.

To allow time for those discussions to continue, Federal Reserve officials were involved in negotiations to facilitate a ceasefire, or cessation of litigation, among the three companies.

Finally, on October 10, the parties finalized a standstill agreement—under which Wachovia, Citigroup, and Wells Fargo agreed to suspend all formal litigation activities for two days, including discovery, and to otherwise cooperate to maintain the status quo in any litigation…

Later, the agreement was extended until October 10.

The result was that on October 10, Citigroup announced the termination of negotiations with Wells Fargo on the Wachovia transaction - Citigroup stated that it would not obstruct the merger between Wells Fargo and Wachovia.

On October 10, the U.S. federal antitrust regulator approved Wells Fargo's acquisition of Wachovia.

On October 10, the Federal Reserve also gave the green light to the transaction.

After the completion of this merger, Wells Fargo will receive $4480 billion in bank deposits from Wachovia. It announced that after the merger of the two companies, its business scope will cover 39 areas in 10761 states in the United States.
In fact, the Federal Trade Commission of the United States should have completed the review before the end of the 30-day review period, but it chose to accelerate the approval; the Federal Reserve also quickly shortened the review period and approved the transaction, allowing the transaction to be completed within 5 days.

In this transaction, it is worth mentioning that Wells Fargo will calculate Wachovia's non-performing assets at fair value, which also shows that Wells Fargo's asset condition is very strong and can cope with the asset write-downs that must be made after the acquisition of Wachovia. This is the main reason why Wells Fargo finally won the competition with Citigroup for the acquisition of Wachovia.

After reaching this acquisition agreement, Wells Fargo then announced that it was ready to transfer the problematic assets of Wachovia to its own balance sheet at a cost of $100 billion, and issue $200 billion of common stock to improve its balance sheet. It was from that time that BFT Fund began to contact and negotiate with Wells Fargo to purchase these common stocks.

So far, Barron has invested in Goldman Sachs, Morgan Stanley, JPMorgan Chase and Wells Fargo through IC Capital and BFT (British Fortune Time) funds.

Among them, JPMorgan Chase and Wells Fargo will alternately take the position of the largest bank in the United States in the future...

And used Standard Chartered Bank to acquire Merrill Lynch to form Standard Chartered-Merrill Lynch.

Taking advantage of the subprime mortgage crisis, he has basically completed his layout in American commercial banks and investment banks.

However, the U.S. stock market has not yet fallen to its lowest point, and the share prices of most companies still have more than three months of decline to go.

Therefore, although a portion of the profits from shorting the subprime mortgage crisis have been withdrawn from the Black Swan Fund, its short selling has not yet ended.

……

"For the Friendship Insurance Group, it's nothing more than a question of the acquisition price. Our last offer was considered insincere, and according to our analysis, their board of directors' psychological expectation is more than 30 billion US dollars..."

Under Barron's instructions, Amber Sheen did not lower the acquisition price to the lowest through continuous negotiations, but instead combined the efficiency of the acquisition...

He told Barron:

"Although I think that if the amount is less than 27 billion US dollars, it is entirely possible to force the other party's board of directors to succumb to the pressure of shareholders, but as you said, if time drags on, it will easily attract the attention of other insurance giants, such as Prudential Group..."

"And in the final analysis, acquiring the Friendship Insurance Group is not our ultimate goal. It is just one part of our overall plan. We don't think it is appropriate to spend too much time on it."

Barron said:

"Most of the time, even if it means making tactical concessions in order to achieve strategic goals, it is well worth it."

On October 10, Cavendish Trust signed an agreement with Friends Provident Group to complete the acquisition of Britain's fifth largest life insurance company for US$30 billion in cash.

After completing this acquisition, Amber Sheehan, the manager of the Cavendish Trust Fund, said that they will reorganize the Friends Insurance Group to improve its profitability.

In addition, Youcheng Insurance Group will cooperate with DS Group to improve the investment portfolio of the insurance group's funds and turn its investments from losses to profits.

And Amber Sheehan predicts that they will acquire at least two more insurance companies in the future, and the acquisition by Youcheng Group may be the smallest among them.

But he declined to reveal his next acquisition target.

(End of this chapter)