Wells Fargo selling retirement unit to Principal Financial for $1.2-billion GlobeBusiness
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.
. 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.
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