Wells Fargo, Security Pacific Reportedly Consider Merger

Wells Fargo & Co. and Security Pacific Corp. met secretly last month to discuss a possible merger that would create the nation’s second-largest bank holding company, according to a report published today.

Wells Fargo Chairman Carl E. Reichardt initiated the talks with Robert H. Smith, Security Pacific’s chief executive officer, and the two even started discussing merger terms, the Wall Street Journal reported.

However, the newspaper said negotiations were suspended shortly before Security Pacific’s Dec. 10 announcement that it would take a large loan-loss provision in the fourth quarter and abandon worldwide banking.

Both sides are expected to resume talks, the newspaper quoted unidentified investment advisers familiar with the proposal as saying.

“I believe they said, ‘Let’s talk again,’ ” one adviser said.

Under the proposed merger terms discussed by Reichardt and Smith, each company’s shareholders would own about 50% of the new company, according to the report.

Both men also discussed how Reichardt, 59, would run the merged company for several years before Smith, 55, took the helm, it said.

Such a combination would be the largest bank merger ever and create the nation’s second-biggest bank with assets of about $146 billion. New York-based Citicorp is the largest U.S. bank with nearly $228 billion in assets.