This analysis examines various questions raised by the merger of Wells Fargo Bank with First Interstate Bank. It is argued that this merger may be the biggest bank merger in history, and is definitely the largest unsolicited bid. As such, the merger may have far-reaching implications for banking in general and particularly for customers of both banks. The major issues addressed in this discussion include: questions of compatibility between the two banks, consequences for the industry as a whole, impact of the merger at the community level, and potential affects for personnel, branches, and customers.
It is argued that the merger likely began as an attempt by Wells Fargo to secure greater base market territory; yet this merger may also be an indication of future banking industry trends. The move reflected by this merger is described as one from a degree of higher personal service and less efficiency to less personalized service and greater efficiency.
San Francisco banking giant Wells Fargo recently acquired Southern California rival First Interstate, in what might be the biggest bank merger in history (because the Wells/First and the Chase/Chembank mergers involved stock swaps, precise valuations are a bit fuzzy), and is certainly the largest unsolicited bid (Mulligan, 1995, p. A1). Coming amid a period of rapid consolidation in the banking industry, Wells Fargo officials may have felt that the takeover was necessary in order to maintain a competitive position, but many questions remain unanswered about the merger and its impact. Among these are: Are Wells Fargo and First Interstate compatible? What are the consequences for the industry? What impact will the merger have on the effected communities? What are the consequences for personnel, branches, and customers? This paper will look at each of these questions one at a time.
With assets of approximately $51 Billion, Wells Fargo is the nation's 17th largest bank. F...