If all goes well with the potential deal, worth possibly more than $1 billion, an announcement could be made later this month.
According to sources familiar with the matter at hand, Principal Financial Group Inc is in advanced talks to acquire Wells Fargo & Co’s retirement plan services business; the deal could potentially be worth more than $1 billion.
The U.S. banking giant is trying to streamline its business as it grapples with the fallout of customer abuse scandals in he U.S. In February 2018, the U.S. Federal Reserve had also slaped with an unprecedented asset cap citing “widespread consumer abuses and compliance breakdowns” which essentially checked its growth capabilities.
Well Fargo’s retirement plan services business, which includes Wells’ 401(k) savings accounts unit, would expand a similar business of Principal Financial. Subject to successful conclusion of the deal, an announcement could be expected later this month, said sources speaking on the condition of anonymity since the matter is confidential.
Both, Wells Fargo and Principal Financial declined comment.
Des Moines, Iowa, based Principal Financial is a life insurance and financial services group which has a market capitalization of $14.5 billion.
The potential move marks the latest divestment by Wells Fargo.
Last year, Wells Fargo had announced deals “to sell 52 branches spread across Indiana, Michigan, Ohio and Wisconsin to Flagstar Bancorp Inc, as well as a $1.7 billion deal to offload its Puerto Rico auto finance business to the local unit of Popular Inc”.
Following its disclosure three years ago that it had created millions of fake customer accounts, regulators had initiated probes into its mortgage foreclosures, wealth management and auto insurance sales businesses, all of which resulted in billions of dollars in fines.