US banking group Wells Fargo is to buy Prudential Financial’s stake in a joint brokerage venture — Wells Fargo Advisors — for 4.5 billion dollars in cash by year’s end.
Wells Fargo made the announcement Tuesday, a day after it agreed that it would repay the US Treasury Department 25 billion dollars in public money it received at the peak of the financial crisis here.
“Wells Fargo will acquire Prudential’s interest on or before December 31, 2009,” the two groups said in a joint statement.
Prudential Financial announced a year ago its plans to sell its stake in the brokerage venture.
“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 A.G. Edwards & Sons,” the statement added.
Prudential Chairman and CEO John Strangfeld said the company was “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,” he added.
