Principal Buys Wells Fargo

Principal buys Wells Fargo.
   
Principal Financial buys Wells Fargo retirement services for $1.2 billion.
   
Principal will take over Wells’ contribution, benefit, executive deferred compensation, employee stock ownership plans, institutional trust and custody, and institutional asset advisory businesses.

Dan Houston of Principal said: ‘Retirement is at the heart of our business and core to our future. This will be a powerful combination for customers, employees, and shareholders as we solidify our place as a top-three leader in the US retirement market. The acquisition will bring expanded capabilities, reach, and scale. Fueling our ability to compete, invest, and grow to help more people to achieve their retirement outcomes.’ 

Jon Weiss of Wells Fargo said: ‘This sale reflects Wells Fargo’s strategy to focus our resources on areas where we can grow and maximize opportunities within wealth, brokerage, and asset management.’ 

With this deal, Principal doubles its US retirement business, while adding institutional trust and custody offerings for the non-retirement market. Principal advances with mid-sized employers as 67 percent of Wells Fargo’s institutional retirement assets are in plans ranging from $10 million to $1 billion. The firm is poised to bring a broader set of expertise to its customers with investments in AI and tech, leveraging synergy and aptitude. 

Renee Schaaf of Principal said: ‘We are deeply committed to helping people have enough, save enough, and protect enough in retirement. Together with the Wells Fargo Institutional Retirement & Trust business, our customers can expect a continued focus on delivering differentiated investment, income and financial wellness solutions that empower them to reach their retirement goals.’

Lazard was financial adviser to Principal. Debevoise & Plimpton was legal counsel. 

Skadden, Arps, Slate, Meagher & Flom was Wells Fargo’s legal adviser.

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