The Wells Fargo-Wachovia deal explained

WHO’S BUYING WACHOVIA?

The winner looks to be Wells Fargo. The outcome had been in dispute in recent days until Citigroup backed out of negotiations yesterday with federal regulators and Wells Fargo over Wachovia’s future. Citigroup had earlier negotiated a deal for Charlotte, N.C.-based Wachovia. A few days later, Wachovia agreed to a far more lucrative offer to join forces with Wells Fargo. Shareholders are expected to approve the merger since the value of common stock is preserved in the deal, unlike the Citigroup offer. Citigroup’s promising legal action, alleging breach of contract.

THE ATLANTA EFFECT

Wachovia, the second-biggest bank in the metro Atlanta market by deposits, has about 5,100 employees and 201 branches here.

The Wells Fargo deal helps a bank with a strong presence on the West Coast and Midwest become a coast-to-coast player rivaling Bank of America and JP Morgan Chase. Wells Fargo offers a broad array of financial services, such as home mortgages, wealth management and insurance.

THE CUSTOMER EFFECT

Wachovia customers shouldn’t notice immediate changes to any accounts. Customers will continue banking as usual.

The takeover of Wachovia could create an opening for other banks in Atlanta to woo customers away. But experts including Walt Moeling, a banking lawyer with Powell Goldstein, have said Wells Fargo has a reputation for being a strong local competitor and could do a good job of retaining customers. Some experts predicted it would be better at stealing market share, too, luring customers from other banks.