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CHICAGO-After months of discussions and due diligence, Wells Fargo & Co. agreed late last week to purchase ACO Brokerage Holdings Corp., the parent company of Acordia Inc., for an undisclosed sum.
The deal, expected to be completed during the second quarter, satisfies the needs of both firms. Chicago-based Acordia, the world's seventh-largest insurance broker, was exploring exit strategies for its short-term investors, while San Francisco-based Wells Fargo, the nation's seventh-largest bank, wanted to broaden its array of financial products.
It also is expected to create synergies for various classes of clients of the two companies, as well as broad cross-selling opportunities that could benefit customers.
The combination of Minneapolis-based Wells Fargo Insurance Inc. and Acordia will create the first bankowned insurance broker to break into Business Insurance's top 10 rankings of the world's largest insurance brokers.
Wells Fargo Insurance, which
ranked as the eighth-largest broker See Merger on page 30 of U.S. business last year, reported roughly $220 million in 2000 revenues. That figure is made up of its property/casualty agency business and its crop, hail and multiperil agency business, which operates as Rural Community Services Inc. The approximately $63 million derived from Wells Fargo Insurance's property/casualty business in 2000 will be merged into Acordia, which will maintain its name and leadership under Frank C. Witthun, who signed a three-year contract to serve as Acordia's president. Mr. Witthun will report to Tim King, who remains president of Wells Fargo Insurance. Acordia's headquarters is still under discussion but will most likely move...