American financial services firm Principal Financial Group has reportedly reached advanced stage of negotiations to buy retirement plan services business of Wells Fargo & Co.
Sources familiar with the development were quoted by Reuters as saying the proposed deal might be valued at more than $1bn.
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Following breakout of customer abuse scandals, Wells Fargo has been looking to restructure its business.
The US Federal Reserve barred Wells Fargo from increasing its size. Additionally, the US financial regulator also put an asset cap in February 2018, citing “widespread consumer abuses and compliance breakdowns.”
The bank’s retirement plan services unit includes Wells’ 401(k) savings accounts business. It is believed that the proposed deal would boost a similar business of Principal Financial.
A source told the publication a deal could be announced later this month provided the negotiations are concluded successfully.
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By GlobalDataPrincipal Financial operates as a life insurance and financial services company and has a market capitalisation of $14.5bn.
In 2018, Wells Fargo revealed its plan to divest 52 branch offices in Indiana, Michigan, Ohio and Wisconsin to Flagstar Bancorp.
During the same year, the American bank signed a $1.7bn agreement to sell its Puerto Rico auto finance business to the local unit of Popular.
