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Taking the banking community by complete surprise, Wells Fargo Bank announced Friday it is buying Crocker Bank for $1.08 billion from Crocker's parent, Midland Bank of London.
The deal was one of banking's best kept secrets since late last year, when Wells Fargo approached the London-based bank with the offer.
The purchase price, which Wells Fargo says it will pay mostly in cash, represents Crocker's book value to Midland Bank.
If the acquisition receives shareholder and regulatory approval, the new institution will operate under the name of Wells Fargo Bank.
Analysts and industry observers expressed astonishment at the surprise announcement, but quickly praised the deal.
"This was total shock. There wasn't blessed word about this deal," says one well-connected banking attorney in the city. "But it makes sense," he added. "Both Wells Fargo and Crocker have been concentrating on consumers and small businesses recently and the combination could be very competitive."
Wells Fargo Chairman and Chief Executive Officer Carl E. Reichardt says the...