Just days after Wachovia stunned the financial world with a $15.4 billion agreement to sell itself to Wells Fargo, the deal is on hold. According to the Associated Press, State Supreme Court Justice Charles Ramos has issued an order blocking the sale, which promises to pit the third and fourth largest U.S. banks against each other in a lengthy legal battle.
Officials from Wachovia stated there was nothing to stop it from scrapping an earlier deal with Citigroup, which would have involved government assistance. But New York-based Citigroup is challenging the Wells Fargo deal on the grounds that it is a clear breach of an exclusivity agreement. Wachovia has fallen to eighth place among U.S. banks due to a drop in its stock price and the new inclusion of Goldman Sachs Group and Morgan Stanley as bank holding companies.