Goldman eyes up merger with Wells Fargo, PNC & US Bancorp on its shortlist
Goldman Sachs could be on the hunt for a key acquisition in the banking sector with Wells Fargo, PNC and US Bancorp, speculated to be on the shortlist for a merger deal, according to a Fox Business report.
The development was first revealed in a tweet by the publication’s senior correspondent, Charles Gasparino, saying that sources told him Goldman Sachs’ “weakening biz model” would “force a merger.”
The report highlights that the need for Goldman to grow, particularly as the coronavirus has largely shut down deal-making, has prompted a new round of speculation that the investment bank might merge with a big commercial bank, such as Wells Fargo, or even PNC Bank.
Investment banking sources tell Fox Business of the growing rumours regarding Goldman, under CEO David Solomon, seeking a deal with a major commercial bank in the coming months. This would be a radical shift for a firm that has valued its independence as a “white shoe” investment bank since its founding in 1869.
Goldman Sachs’ chief financial officer, Stephen Scherr, says the bank would be open to acquisitions as a way to boost its current projects.
Partnering with Goldman Sachs could be a boon for Wells Fargo, which saw its reputation damaged after a scandal last year involving fake accounts made in order to hit a quota. The scandal costed the bank billions in court-mandated fines and tarnished relationships with business clients. CEO, John Stumpf, was also let go due to the scandal.
Wells Fargo’s new CEO, Charles Schwarf, is a former JP Morgan executive, and that bank has always held to a belief that partnerships between commercial and investment banking can lead to better customer service, Fox Business reported.
PNC may be looking for a new partner after announcing plans to sell its 22% stake in money management Blackrock, sources speculated, the report adds.
PNC held around 35 million common and Series B preferred shares in the company, and CEO William Demchak says the sale would leave PNC well-positioned to take advantage of investment opportunities later on, notes the Pittsburgh Post-Gazette.