Wells Fargo is saying goodbye to its retirement-plan business as the bank continues to grapple with a penalties, legal fees and a backlash over its scandals
New York .
Principal Financial signed a $1.2 billion deal on Tuesday to acquire Wells Fargo's institutional retirement and trust business. The unit serves 7.5 million retirement customers across the United States, offering 401, pension, employee stock ownership and other services used by employers. Wells Fargo said the deal reflects its goal of focusing resources on areas it can grow and maximizing opportunities within wealth, brokerage and asset management.
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Principal Financial to acquire Wells Fargo's institutional retirement business for $1.2 billionPrincipal Financial Group said Tuesday it has agreed to acquire Wells Fargo & Co.s Institutional Retirement & Trust business for $1.2 billion. The deal will double the size of Principal's U.S. retirement business measured by total recordkeeping assets, the company said in a statement. "In addition to increased scale, Principal will gain a strong foothold with mid-sized employers as more than two-thirds of Wells Fargo's institutional retirement assets are in plans ranging from $10 million to $1 billion," said the statement. The deal is expected to boost net income and non-GAAP operating per-share earnings in 2020 and will be financed with a mix of cash and senior debt financing. The deal is expected to close in the third quarter. Wells Fargo shares were slightly higher premarket, while Principal's shares were not yet active.
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