The acquisition of Wachovia by Citigroup is not going as smoothly as planned. Today, Wachovia sold itself to Wells Fargo for $15 billion dollars. Citigroup wants to keep the deal arranged by the FDIC, where it acquired Wachovia's assets for $2.2 billion. Wachovia obviously thinks it is better off with the Wells Fargo deal than a government seizure. I'm pretty sure Wells Fargo is anticipating the passage of the $700 bailout bill by the House this afternoon, where Wachovia's bad mortage debt will be bailed out with taxpayer money. At this time, the matter is unsettled.
ADDENDUM [10/4/08]: And the winner is... the lawyers! Looks like who gets Wachovia is going will be taken to court. Since Wells Fargo is now subsidizing Wachovia, Citigroup just has to play a waiting game until that become unfeasable and the FDIC has to formally seize Wachovia. [10/6/08]: The FDIC is going to have to be more authoritative about its "seizures" from now on; the Citigroup injunction against the Wells-Wachovia sale was turned down in court. The Fed is urging the two banks to come to an agreement. [10/9/08]: Wells Fargo prevails. [1/1/09]: The purchase of Wachovia by Wells-Fargo was finalized today for $12.7B.