Principal Financial Group to acquire large chunk of Wells Fargo business

[capitalcityguy]

This is a big deal for this Des Moines based company.

https://www.marketwatch.com/story/p...or-12-billion-2019-04-09?mod=newsviewer_click

 

[Gunnerclone]

That seems pretty aggressive for Principal. Must be a pretty good deal.

 

[capitalcityguy]

That seems pretty aggressive for Principal. Must be a pretty good deal.

Agreed. PFG probably getting some benefit off of WF currently tarnished name but yes this is large transaction. The financial news industry got wind of this earlier and described it like this:

There would be a new behemoth among record keepers of defined-contribution plans if Principal Financial Group were to follow through on a reported deal to acquire Wells Fargo & Co.'s retirement-plan unit.

The deal — which could fetch more than $1 billion, according to Reuters — would be among the industry's largest ever, and more than double Principal's retirement plan assets under administration.

link to earlier "leaked" source: https://www.investmentnews.com/article/ ... y-20190318

 

[capitalcityguy]

As a Des Moines homer, i find this really interesting in the fact that while Wells has a large presence in the metro already, I believe it is mostly banking and mortgage divisions so this doesn't appear to be a case where an already existing DSM based business is acquiring a business and employees that are already here .

 

[CascadeClone]

Wonder if WF is finding cash to meet the increasing requirements for capital? IDK if that is a concern or not, just came to mind.

 

[pfgemployee]

I'm thinking this may help my job security.

 

[Rabbuk]

Wonder if WF is finding cash to meet the increasing requirements for capital? IDK if that is a concern or not, just came to mind.

I feel like most big banks are not having issues keeping up required capital.

 

[3GenClone]

As a Des Moines homer, i find this really interesting in the fact that while Wells has a large presence in the metro already, I believe it is mostly banking and mortgage divisions so this doesn't appear to be a case where an already existing DSM based business is acquiring a business and employees that are already here .

WF Institutional Retirement and Trust HQ is currently based in Charlotte, NC.

https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=213553567

 

[KnappShack]

I feel like most big banks are not having issues keeping up required capital.

Easiest way to fix that is to wipe out those requirements.

 

[SuperTrooper]

Wonder if WF is finding cash to meet the increasing requirements for capital? IDK if that is a concern or not, just came to mind.

That is correct. I'm changing banks.

 

[Turn2]

WF Institutional Retirement and Trust HQ is currently based in Charlotte, NC.

https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=213553567

So this is a good opportunity for Principal to consolidate operations in Charlotte then, right?

 

[capitalcityguy]

So this is a good opportunity for Principal to consolidate operations in Charlotte then, right?

good one.

Not likely IMO if you look at nothing else more than simply the real estate Principal owns in downtown Des Moines and the fact that the retirement space is already their core business (even prior to this purchase). In talking to some folks this morning, it also sounds like that in addition to Charlette, they have just as many employees in Minneapolis that are affected (and then smaller #’s in 2 or 3 other cities as well).

 

[khardbored]

PFG already runs their non-qualified retirement plan business out of North Carolina.

It appears that WF employees who work in this area will eventually become PFG employees. Wonder how that will all work out.

 

[CycloneDaddy]

Wonder if WF is finding cash to meet the increasing requirements for capital? IDK if that is a concern or not, just came to mind.

This is not even remotely close to the truth.

 

[SECyclone]

I believe this could be because Wells Fargo is still in trouble for their fake account scam. The gov told them they weren’t allowed to grow until they deemed they had fixed their problems. Could be wrong.

 

[capitalcityguy]

I believe this could be because Wells Fargo is still in trouble for their fake account scam. The gov told them they weren’t allowed to grow until they deemed they had fixed their problems. Could be wrong.

I think there might be some truth to that. This article on WHOTV touches more on the deal from WF's situation:

The decision to exit the retirement-plan business also comes as Wells Fargo deals with reputational problems, legal costs and unprecedented sanctions.

The Federal Reserve, citing “widespread consumer abuses,” imposed an asset cap on Wells Fargo in early 2018 that prevents the bank from growing its business.

Principal Financial expressed confidence that the retirement-plan business it’s acquiring isn’t stained by the deep cultural troubles uncovered at Wells Fargo.

Link: https://whotv.com/2019/04/09/princi...irement-plan-business-in-billion-dollar-deal/

 

[CascadeClone]

This is not even remotely close to the truth.

Well, I was just speculating, and said as much in my comment.

Since you seem to know the truth, would you be kind enough to share with the class?

 

[Rabbuk]

Well, I was just speculating, and said as much in my comment.

Since you seem to know the truth, would you be kind enough to share with the class?

https://www.google.com/amp/s/247wal...argo-gets-off-cheap-in-feds-stress-tests/amp/

 

[jmb]

WF Institutional Retirement and Trust HQ is currently based in Charlotte, NC.

https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=213553567

I suspect this won't change the Des Moines job market. They will likely keep that group in NC.

 

[CycloneDaddy]

Well, I was just speculating, and said as much in my comment.

Since you seem to know the truth, would you be kind enough to share with the class?

They did over $28 Billion in stock buyback last year so selling a very small piece of the enterprise shouldnt cause concern.