Brandon Lee
Wells Fargo has a long history of mergers and acquisitions, dating back to the 19th century. In 1923, Wells Fargo Nevada National Bank, formed in 1905 through a merger between Wells Fargo's bank and the Nevada National Bank, merged with the Union Trust Company to form the Wells Fargo Bank & Union Trust Company. This merger led to the creation of a robust banking institution that prospered during the 1920s and successfully navigated the Great Depression. Wells Fargo's history also includes numerous other mergers and acquisitions, such as its merger with Norwest Corporation in 1998, and its acquisition of Wachovia Corporation, including First Union, in 2008. These strategic moves have contributed to the growth and expansion of Wells Fargo over the years.
| Characteristics | Values |
|---|---|
| Year Wells Fargo merged with Union Bank | 1923 |
| Name of the merged entity | Wells Fargo Bank & Union Trust Company |
| Other mergers involving Wells Fargo | Over 1,500 mergers, including with Norwest Corporation in 1998, Wachovia in 2008, and Sonoma Mortgage |
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What You'll Learn
Wells Fargo Bank & Union Trust Company
In 1954, the name of the bank was shortened to Wells Fargo Bank, and in 1960, it merged with American Trust Company, the second oldest financial institution in California, to form the Wells Fargo Bank American Trust Company. The name was changed back to Wells Fargo Bank in 1962.
In 1998, Wells Fargo merged with the Minneapolis-based Norwest Corporation, retaining the Wells Fargo name and moving to Wells Fargo's hub in San Francisco. In 2001, Wells Fargo acquired H.D. Vest Financial Services for $128 million. In 2008, Wells Fargo acquired Wachovia Corporation, including First Union. Between 2001 and 2006, Wachovia bought several other financial services companies in an attempt to become a national bank and comprehensive financial services company.
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Merger with Norwest Corporation
Wells Fargo, in its present form, is the product of more than 1,500 mergers over a nearly 150-year history. One of the most notable mergers was with the Norwest Corporation in 1998.
The Norwest Corporation was a banking and financial services company based in Minneapolis, Minnesota. It was founded in 1872 as the Northwestern National Bank and grew rapidly, with deposits increasing from $50,000 in 1872 to $3 million in 1892, and then more than tripling to over $10 million by 1902. By 1991, Norwest had expanded to 291 bank branches across 11 states, and by the end of 1995, it had total assets of $72.13 billion, making it the 13th largest bank holding company in the US.
On June 8, 1998, Wells Fargo, based in California, and Norwest announced a "merger of equals", creating the largest financial services network in the Western Hemisphere. The deal was valued at $34 billion and brought together two high-performing companies with complementary businesses, products, technology, markets, and customers. The combined company, named Wells Fargo & Company, became the sixth-largest bank in the US, with $191 billion in assets, over 90,000 employees, approximately 20 million customers, and 5,777 financial services stores across 50 states and internationally.
Despite the benefits of the merger, there were also potential barriers and concerns. Wells Fargo and Norwest had contrasting cultures, with Norwest known for its customer service and sales culture, referring to branches as "stores" and bankers as "salespeople". Additionally, Wells Fargo was still recovering from its rushed and poorly managed merger with First Interstate in 1998, which was considered a failure. Many industry analysts viewed the Wells-Norwest merger with caution, emphasizing the challenges of integrating two different corporate cultures.
However, the merger ultimately succeeded in creating a dynamic and geographically diverse organization, with Norwest's banking subsidiary merging with Wells Fargo's Sioux Falls-based banking subsidiary. The merged company retained the well-known Wells Fargo name and moved its headquarters to San Francisco, while also claiming the legacy of Wells Fargo's history dating back to 1852.
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Wells Fargo's expansion
One of the earliest mergers was in 1866, when the "grand consolidation" united Wells Fargo, Holladay, and Overland Mail stage lines under the Wells Fargo name. In 1905, Wells Fargo separated its banking and express operations, with the former merging with Nevada National Bank to form the Wells Fargo Nevada National Bank. This entity then merged with the Union Trust Company in 1923, resulting in the Wells Fargo Bank & Union Trust Company.
The company continued its expansion strategy throughout the 20th century. In 1954, the bank's name was shortened to Wells Fargo Bank, and in 1960, it merged with American Trust Company, forming the 11th largest banking institution in the United States. This merger accelerated Wells Fargo's involvement in international banking, leading to the opening of offices in Tokyo, Seoul, Hong Kong, Nassau, Mexico City, and other global cities.
In the late 1990s, Wells Fargo merged with the Minneapolis-based Norwest Corporation, retaining the Wells Fargo name. This merger was followed by a series of acquisitions, including Mercantile Financial Enterprises, Inc., Michigan Financial Corporation, and National Bank of Alaska. Through these acquisitions, Wells Fargo expanded its retail banking presence into Michigan and Alaska.
In 2008, Wells Fargo acquired Wachovia Corporation, including First Union. This merger created a coast-to-coast super-bank with $1.4 trillion in assets and 48 million customers, significantly expanding Wells Fargo's operations into nine Eastern and Southern states. The acquisition of Wachovia also brought with it a well-established investment banking practice, which led to the establishment of Wells Fargo Securities in 2009.
In addition to these major mergers, Wells Fargo has continued to grow through smaller acquisitions and expansions. For example, in 2012, the company acquired Merlin Securities, and in 2015, it acquired GE Capital Rail Services and three GE units focused on business loans and equipment financing. Wells Fargo has also been a leader in online banking, becoming the first major financial services firm to offer internet banking in 1995.
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Wells Fargo's acquisitions
Wells Fargo, in its present form, is a result of a merger between Wells Fargo & Company and the Minneapolis-based Norwest Corporation in 1998. The new company chose to retain the name "Wells Fargo" and moved to Wells Fargo's hub in San Francisco.
Wells Fargo's history is characterised by mergers and acquisitions. In 1923, Wells Fargo Nevada National Bank, formed in 1905 through a merger between Wells Fargo's bank and the Nevada National Bank, merged with the Union Trust Company to form the Wells Fargo Bank & Union Trust Company. In 1954, the name of the bank was shortened to Wells Fargo Bank. In 1958, Wells Fargo merged with the American Trust Company, forming the Wells Fargo Bank American Trust Company. The name was changed back to Wells Fargo Bank in 1962.
In 1986, Wells Fargo acquired Crocker National Bank from Midland Bank, and in 1987, it acquired the personal trust business of Bank of America. In 2008, Wells Fargo acquired Wachovia Corporation, including First Union. In 2012, Wells Fargo acquired Merlin Securities, which was rebranded as Wells Fargo Prime Services. In 2015, Wells Fargo Rail acquired GE Capital Rail Services and merged with First Union Rail.
In 2021, Wells Fargo acquired Knight Material Technologies, a manufacturer of acid-resistant bricks and resins.
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Wells Fargo's mergers
Wells Fargo, in its present form, is the result of a merger between Wells Fargo & Company and the Minneapolis-based Norwest Corporation in 1998. The merger created the Western Hemisphere's most extensive and diversified financial services network, with $191 billion in assets, more than 90,000 employees, approximately 20 million customers, and 5,777 financial services stores in 50 states and internationally. The new company retained the name Wells Fargo & Company and became the sixth-largest bank in the United States.
Prior to the Norwest-Wells Fargo merger, Wells Fargo had a failed merger with First Interstate in 1998, which was a hostile takeover rushed and managed ineffectively. In the years following the Norwest merger, Wells Fargo continued its acquisition spree, buying 13 companies in 1999, including Mercantile Financial Enterprises, Inc. In 2000, Wells Fargo expanded into Michigan and Alaska through the buyout of Michigan Financial Corporation and the National Bank of Alaska, respectively. That same year, Wells Fargo paid $3 billion in stock for First Security Corporation, a $23 billion bank holding company based in Utah, making Wells Fargo the largest banking franchise in the West.
In 2008, Wells Fargo acquired Wachovia Corporation, including First Union, in a deal that created a coast-to-coast super-bank with $1.4 trillion in assets and 48 million customers. Wells Fargo Securities was established in 2009 to house the company's new capital markets group, obtained during the Wachovia acquisition. In 2011, Wells Fargo hired 25 investment bankers from Citadel LLC, and in 2012, it acquired Merlin Securities, which was rebranded as Wells Fargo Prime Services.
Wells Fargo's history dates back to 1852 when Henry Wells and William G. Fargo formed Wells, Fargo & Company to provide express and banking services to California. In 1866, a "grand consolidation" united Wells Fargo, Holladay, and Overland Mail stage lines under the Wells Fargo name. In 1905, Wells Fargo separated its banking and express operations, and its bank merged with the Nevada National Bank to form the Wells Fargo Nevada National Bank. In 1923, this entity merged with the Union Trust Company to form the Wells Fargo Bank & Union Trust Company. In 1954, the name was shortened to Wells Fargo Bank, and in 1958, it merged with American Trust Company to form the Wells Fargo Bank American Trust Company, renamed Wells Fargo Bank again in 1962.
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Frequently asked questions
Yes, Wells Fargo Nevada National Bank merged with the Union Trust Company in 1923 to form the Wells Fargo Bank & Union Trust Company.
Wells Fargo has been involved in numerous mergers and acquisitions over the years. Here are a few notable ones:
- Merger with Norwest Corporation in 1998.
- Acquisition of Wachovia Corporation in 2008.
- Merger with American Trust Company in 1960.
- Acquisition of First Security Corporation in 2000.
The merger with Wachovia in 2008 allowed Wells Fargo to expand its operations into nine Eastern and Southern states and created a coast-to-coast super-bank with $1.4 trillion in assets and 48 million customers.
The merger with Norwest Corporation in 1998 resulted in the formation of a new company that retained the name "Wells Fargo." This merger combined Wells Fargo's banking subsidiary with Norwest's banking subsidiary, and Norwest continued its tradition of making numerous smaller acquisitions each year.
