Wells Fargo's serial acquirer goes out with a bang

By Bob Margolis

NEW YORK (Reuters) - Richard Kovacevich, Wells Fargo & Co's self-confessed "serial acquirer" chairman, who is due to retire later this year, is going out with a bang.

In a move that shocked Wall Street, infuriated Citigroup Inc and blindsided regulators, the San Francisco-based bank scooped up troubled Wachovia Corp, until recently the larger institution by both assets and market value, for more than $16 billion.

"This is a massive defeat of Citi, and an amazing trump for Kovacevich," said Marshall Front of Front Berman Associates. "Somebody is finally stepping up with real money, taking this deal out of a government bailout situation...This may mark the bottom of the credit cycle and perhaps the system seems to be reliquifying."

Kovacevich, a 6-foot-3-inch (1.9-meter) native of Tacoma, Washington, could have been a professional baseball pitcher, having been courted by the New York Yankees. That idea was derailed when he tore his rotator cuff while at Stanford University. He eventually received three degrees from the school.

While not a star on the diamond, Kovacevich, 64, is a player on the links, sporting an 11.2 handicap.

Kovacevich wasn't mincing his words on Friday with regard to Citigroup's threats to sue Wells for tortious interference.

"We get sued all the time, and many times the suits are meritless," he told Reuters.

Kovacevich will step down as chairman of what had been the fifth-largest U.S. bank this year when he hits the mandatory retirement age of 65. While he passed the chief executive role in June 2007 to longtime colleague John Stumpf, Kovacevich remains as much the public champion of the San Francisco bank as his successor.

'FIXER-UPPERS'

Unlike many large rivals, Wells Fargo has suffered little from the nation's housing and credit crisis, despite being the second-largest U.S. mortgage lender.

The bank has seen three straight quarters of profit declines, but has come through a massive credit crises much better than most of its competitors, in part because it had less exposure to the subprime mortgages whose failure undermined the financial sector.

Kovacevich admitted at a recent conference to being a "confessed serial acquirer," and that in eyeing targets that were "fixer-uppers," he felt like "a kid in a candy store."

Wachovia, saddled with billions of dollars of toxic mortgage paper, is certainly a fixer upper, but the deal catapults Wells Fargo into the ranks of the premiere U.S. national banks.

The combined company will have total deposits of $787 billion and assets of $1.42 trillion, The bank will operate in more than 10,000 locations.

The two banks currently employ a combined 280,000 people.