Business Moves

Wells Fargo, Wachovia

Wells Fargo & Co. has won the bidding for Wachovia Corp., beating out Citicorp.

Citicorp, while stepping aside, said it plans to pursue damages for interference with the deal it had worked out with Wachovia and federal officials before Wells Fargo entered the picture.

Wells Fargo is proceeding with its merger with Wachovia Corp. as a whole company transaction with all of Wachovia’s banking and other operations including insurance.

Wells Fargo will acquire all outstanding shares of common stock of Wachovia in a stock-for-stock transaction. Wells Fargo will acquire all of Wachovia Corp. and all its businesses and obligations, including its preferred equity and indebtedness, and all its banking deposits.

The combined company will have $1.42 trillion in assets, $787 billion in deposits, 48 million customers, $258 billion assets under management in mutual funds, 10,761 stores, 12,227 ATMs and 280,000 team members. The merger will create a coast-to-coast community banking presence with community banks in 39 states and the District of Columbia.

Wells Fargo also gets Wachovia Insurance Services, Inc., an insurance broker with annual revenues of approximately $400 million and annual premium placements exceeding $4 billion. Wachovia Insurance Services and its affiliates employ approximately 1,300 insurance professionals in 34 offices throughout 15 states and the District of Columbia.

Citigroup said it believes that it has strong legal claims against Wachovia, Wells Fargo and their officers, directors, advisors and others for breach of contract and for tortious interference with contract. However, Citigroup has decided not to ask that the Wells Fargo-Wachovia merger be enjoined.

Provider Insurance, Gorman Agency

Needham, Mass.-based Provider Insurance Group Inc. has acquired the James Gorman Insurance Agency’s personal lines of insurance. The acquisition includes about 300 accounts of personal lines of insurance and 80 accounts of commercial lines. James Gorman Agency is located in Boston.

Amercian Eagle

The New York Liquidation Bureau said it has completed all necessary steps to bring to a close the ancillary receivership in New York of American Eagle Insurance Company, a Texas-based property/casualty firm declared insolvent in 1997.

American Eagle had been a regional insurance carrier involved in aviation and other transportation, construction and marine underwriting. The Insurance Commissioner of the State of Texas, who became Receiver and liquidator of American Eagle when it was declared insolvent, appointed the New York State Superintendent of Insurance as Ancillary Receiver in 1998 and subsequently directed the Liquidation Bureau to take possession of the company’s property and business in the Empire State.

The Liquidation Bureau reviewed claims by New York policyholders and certified payments of $1.558 million to 31 claimants. Eligible claims up to $1 million are covered by New York State’s Property/Casualty Insurance Security Fund, which has a claim in American Eagle’s liquidation proceeding in Texas for reimbursement of the payments it made on claims.

According to the Texas Receiver’s Web site, American Eagle’s insolvency triggered the protection of 45 state insurance guaranty funds, including the New York Security Fund, which have paid over $45 million in covered claims for American Eagle’s policyholders. Early access distributions by the estate to guaranty funds paying covered claims currently exceed $25 million.

Main Street America, Great Lakes

The Main Street America Group, based in Jacksonville, Fla., completed its acquisition of Great Lakes Casualty Insurance Co., a Michigan-domiciled private passenger auto insurance carrier. Great Lakes generated approximately $9.5 million in premium in 2007. The company has approximately 6,300 policyholders throughout Michigan.

XL

XL Insurance has opened a new regional office in Boston located at 470 Atlantic Avenue. XL Insurance appointed David Molitano to a new Boston underwriting position.

Topics Texas New York