|Citigroup had already begun running full-page print ads announcing the merger this week in mainstream newspapers like The Wall Street Journal and The New York Times.|
Just four days after a tentative merger agreement, brokered in partnership with the federal government, was reached with Citigroup, Wachovia instead opted to go with Wells Fargo. The bank cut its own, more favorable deal with Wells Fargo that will allow all of Wachovia's business units to remain intact and requires no assistance from the government.
There's just one problem: Citigroup is balking. A Citi press statement released after Wachovia and Wells announced their news read: "Citi has demanded that Wachovia and Wells Fargo terminate and not proceed with any proposed transaction, any conduct in furtherance thereof, or any other act in violation of the exclusivity agreement."
Citigroup -- whose creative and media agencies are Publicis Groupe's Publicis and WPP Group's Mediaedge:cia -- had already begun running full-page print ads announcing the merger this week in mainstream newspapers like The Wall Street Journal and The New York Times. The ads that ran in daily newspapers including USA Today were done with the approval of Wachovia's CMO, a Citi spokeswoman said.
The FDIC, too, is siding with Citi. "The FDIC stands behind its previously announced agreement with Citigroup. The FDIC will be reviewing all proposals and working with the primary regulators of all three institutions to pursue a resolution that serves the public interest," it said in a statement.
The longer the wrangling over Wachovia goes on, the more it casts doubt over the fortunes of WPP's Ogilvy, which had been awarded the plum $150 million account only days before the Citi pairing was announced. (Ogilvy was named lead agency, with Maxus for media planning and buying, Neo for digital marketing and Soho Square for specialty marketing services.) The bank, according to a Wachovia spokeswoman, "paused the finalization" of that relationship pending the merger -- and now, with the potential new merger partner in Wells Fargo, it remains on pause.
Wells would phase out Wachovia brand
So what does Wells Fargo, which works with Omnicom Group's DDB, Los Angeles, for creative and OMD for media buying, have to say about its branding plans? Acknowledging that branding is "way, way, way down the track" if the merger is approved, a spokesman said the Wachovia brand will eventually be phased out. He said the combined company would be called Wells Fargo & Co. and will use the Wells Fargo brand.
That is, of course, providing the deal goes through. The Wells Fargo website makes no mention of the deal, but does offer general reassuring banking and investment messages in ads at the top of the page: "These are difficult markets. Rely on the strength, stability and experience of Wells Fargo Investments." And "We've stood strong for over 150 years. You can bank with confidence today. Switch to Wells Fargo -- where stability and security are as important as the success of our customers."
A Wachovia spokeswoman said its employees received messages regarding the Wells Fargo deal and Wachovia posted information today on its website about how the deal will affect customers. "The most important message to our customers today is it's business as usual. There are no immediate changes to their accounts or their relationship with Wachovia," she said. She declined to comment on specific advertising plans, but said Wachovia will plan "other communication" to its customers in the coming days.
Big bucks hang in the balance
Meanwhile, the pause goes on for Ogilvy, and the Wachovia account could wind up at one of three holding companies: Omnicom, Publicis or elsewhere within parent WPP.
A Wachovia-Wells Fargo combination would yield a player that spends $232 million, a calculation arrived at by adding TNS Media Intelligence's 2007 measured-spending figures. A Wachovia-Citi combo would be a far larger player when it comes to spending, with a $542 million marketing war chest.
Should Wachovia's deal with Wells Fargo go through, the combined bank will hold $1.42 trillion in assets ($609 billion from Wells and $812 billion from Wachovia) and serve 48 million customers (20 million from Wells, and 28 million from Wachovia).