Wells Fargo Enters Agreement with Computershare to Sell Wells Fargo Corporate Trust Services

Rhea-AI Summary

Wells Fargo has announced a definitive agreement to sell its Corporate Trust Services (CTS) business to Computershare for $750 million. The transaction, expected to close in the second half of 2021, aligns with Wells Fargo's strategy to focus on core businesses. Wells Fargo’s CTS provides trust and agency services for debt securities and has a strong market presence. Approximately 2,000 CTS employees will transition to Computershare, which is known for its commitment to client service and innovative product development.

Positive

• Wells Fargo's sale of CTS aligns with its strategy to focus on core businesses.
• The agreement garners a purchase price of $750 million, which provides significant liquidity.
• Computershare's expertise and client service could enhance the value of CTS services post-acquisition.

Negative

• Wells Fargo will lose a significant business segment that contributes to its service offerings.

Wells Fargo & Company (NYSE: WFC) today announced it has entered into a definitive agreement to sell its Corporate Trust Services (CTS) business to Computershare. The transaction is expected to close in the second half of 2021, subject to customary closing conditions. Under the terms of the agreement, the purchase price is $750 million.

(Photo: Wells Fargo)

Wells Fargo’s CTS business provides a wide variety of trust and agency services in connection with debt securities issued by public and private corporations, government entities, and the banking and securities industries. It is annually ranked among the top service providers in most league tables by deal count and dollars serviced.

“This transaction is consistent with Wells Fargo’s strategy of focusing on businesses that are core to our consumer and corporate clients,” said David Marks, head of Wells Fargo Commercial Capital. “Additionally, we believe that Computershare’s similar approach to service and their emphasis on innovative product development will be valuable to our clients and Corporate Trust Services colleagues in the future,” he added.

With decades of experience and 2,300 clients across North America in a variety of industries, Computershare brings a long-term commitment to the business, along with a market-leading client services approach. It is also the largest Title Custodian service provider in the Canadian Mortgage-Backed Securities industry. Computershare’s Frank Madonna will lead the integration, as approximately 2,000 CTS employees across the U.S. are expected to transfer to the company as part of the acquisition.

“We’re excited to welcome these new employees to the Computershare family. We know they are interested in the same things we’re passionate about: providing excellent customer service, supporting diversity and inclusion efforts, and giving back to local communities,” said Madonna. “We’re confident that as our businesses come together following the closing, our client proposition will be second to none in North America,” he added.

Wells Fargo Securities LLC served as exclusive financial advisor, and Sullivan & Cromwell LLP served as legal counsel to Wells Fargo.

About Wells Fargo

Wells Fargo & Company is a leading financial services company that has approximately $1.9 trillion in assets and proudly serves one in three U.S. households and more than 10% of all middle market companies in the U.S. We provide a diversified set of banking, investment, and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. Wells Fargo ranked No. 30 on Fortune’s 2020 rankings of America’s largest corporations. In the communities we serve, the company focuses its social impact on building a sustainable, inclusive future for all by supporting housing affordability, small business growth, financial health, and a low-carbon economy. News, insights, and perspectives from Wells Fargo are also available at Wells Fargo Stories.

Additional information may be found at www.wellsfargo.com | Twitter: @WellsFargo.

About Computershare Limited

Computershare (ASX: CPU) is a global market leader in transfer agency and share registration, employee equity plans, mortgage servicing, proxy solicitation, and stakeholder communications. We also specialize in corporate trust, bankruptcy, class action, and utility administration, and a range of other diversified financial and governance services.

Founded in 1978, Computershare is renowned for its expertise in high integrity data management, high volume transaction processing and reconciliations, payments, and stakeholder engagement. Many of the world's leading organizations use us to streamline and maximize the value of relationships with their investors, employees, creditors, and customers. Computershare is represented in all major financial markets and has over 12,000 employees worldwide.

Cautionary statement about forward-looking statements

This news release contains forward-looking statements about our future financial performance and business. Because forward-looking statements are based on our current expectations and assumptions regarding the future, they are subject to inherent risks and uncertainties. Do not unduly rely on forward-looking statements as actual results could differ materially from expectations. Forward-looking statements speak only as of the date made, and we do not undertake to update them to reflect changes or events that occur after that date. For information about factors that could cause actual results to differ materially from our expectations, refer to our reports filed with the Securities and Exchange Commission, including the “Forward-Looking Statements” discussion in Wells Fargo’s most recent Quarterly Report on Form 10-Q as well as to Wells Fargo’s other reports filed with the Securities and Exchange Commission, including the discussion under “Risk Factors” in our Annual Report on Form 10-K for the year ended Dec. 31, 2020, available on its website at www.sec.gov.

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FAQ

What is the purchase price of Wells Fargo's Corporate Trust Services sold to Computershare?

The purchase price is $750 million.

When is the expected closing date for the transaction between Wells Fargo and Computershare?

The transaction is expected to close in the second half of 2021.

How many employees from Wells Fargo's CTS are expected to transfer to Computershare?

Approximately 2,000 CTS employees are expected to transfer.

What is the main purpose of Wells Fargo's sale of its CTS business?

The sale aligns with Wells Fargo's strategy of focusing on businesses that are core to its consumer and corporate clients.

What services does Wells Fargo's Corporate Trust Services provide?

CTS provides trust and agency services in connection with debt securities issued by public and private entities.