Top U.S. retirement plan administrator Principal Financial Group said on Tuesday...
FILE PHOTO: A Wells Fargo ATM machine is shown in Los Angeles, California, U.S., October 19, 2018. REUTERS/Mike Blake/File Photo
- Top U.S. retirement plan administrator Principal Financial Group said on Tuesday it would buy Wells Fargo & Co’s retirement plan services business for $1.2 billion, as it seeks a larger presence in markets serving mid-sized companies. The agreement includes an earnout of up to $150 million tied to better-than-expected revenue retention, payable two years after closing, likely in the third quarter, Principal Financial said.
"Principal will gain a strong foothold with mid-sized employers as more than two-thirds of Wells Fargo's institutional retirement assets are in plans ranging from $10 million to $1 billion," the company said.The deal will be financed with cash and debt and will add to net income and adjusted earnings per share in 2020, Principal Financial said.
Wells Fargo has been looking to trim its business ever since it came under regulatory scrutiny following a sales practice scandal. In 2018, the Federal Reserve slapped it with an unprecedented asset cap, citing “widespread consumer abuses and compliance breakdowns”.Lazard is the financial adviser to Principal, while Debevoise & Plimpton provided legal counsel.Our Standards:
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Principal Financial to acquire Wells Fargo's institutional retirement business for $1.2 billionPrincipal Financial Group said Tuesday it has agreed to acquire Wells Fargo & Co.s Institutional Retirement & Trust business for $1.2 billion. The deal will double the size of Principal's U.S. retirement business measured by total recordkeeping assets, the company said in a statement. "In addition to increased scale, Principal will gain a strong foothold with mid-sized employers as more than two-thirds of Wells Fargo's institutional retirement assets are in plans ranging from $10 million to $1 billion," said the statement. The deal is expected to boost net income and non-GAAP operating per-share earnings in 2020 and will be financed with a mix of cash and senior debt financing. The deal is expected to close in the third quarter. Wells Fargo shares were slightly higher premarket, while Principal's shares were not yet active.
Read more »
Intel downgraded by Wells Fargo on weak 2019 demand and increased AMD competitionWells Fargo lowered its rating of Intel shares to market perform from outperform on Friday, citing weakening 2019 demand coupled with rising competition from Advanced Micro Devices.
Read more »
Wells Fargo and other banks making millions of dollars off college studentsBanks charged college students nearly $25 million in fees on debit cards that are often used to dispense financial aid funds, according to a new report from U.S. Public Interest Research Group.
Read more »
This Veteran Managed Air Force Systems Before Managing $500M At Wells FargoBefore he managed finances, Steve Viets was responsible for managing something completely different: command management systems for the U.S. Air Force
Read more »
Warren Buffett urges Wells Fargo to look beyond Wall Street for next CEO: FTWarren Buffett, Wells Fargo & Co's largest shareholder, urged the bank to l...
Read more »
Wells Fargo, Stuck in ‘Wait-and-See Mode,’ Struggles to Boost Its BusinessesWells Fargo’s 2016 sales scandal has turned into a morass of regulatory problems that won’t go away. Behind the scenes, its business lines are also struggling.
Read more »
How Wells Fargo's regulators and employees drove out its CEOThe day after former Wells Fargo & Co Chief Executive Tim Sloan told U.S. lawmak...
Read more »
Stocks making the biggest moves premarket: Boeing, Wells Fargo, Morgan Stanley, GE & moreSome of the names on the move ahead of the open.
Read more »
Oil prices spike; Tech pressure; Warren Buffett's tip for Wells FargoToday’s top business headlines with ChristineRomans before the opening bell: - Kudlow: Trump's tariff threat a 'warning' - Major averages rise in the first quarter - Weak first quarter earnings expected - Netflix teases possible Beyoncé documentary
Read more »