The bidding is over for the scandal-tarnished mutual fund firm Strong Financial Corp.
Wells Fargo, long thought of as the front-runner for the company, has reached a definitive agreement to purchase Strongs $27 billion in mutual fund assets and $7 billion in institutional investment assets.
Although terms of the deal were not disclosed, according to The Wall Street Journal, Wells will pay less than $500 million in a first payment, and then pay more, up to $200 million, in subsequent installments, depending on which direction Strongs assets under management go.
Since the scandal touched on Strong last fall, the company has lost $8 billion in assets, down to the $34 billion of combined mutual fund and institutional money. The founder of Strong, Richard Strong, could have sold the firm for $1 billion in 1997, but balked.
In a press release posted on Strongs Web site, Wells Fargo investment management head Mike Niedermeyer said, "This is a great strategic fit of investment talent, resources, well-established investment management products and new distribution channels."
"The significant resources and stellar reputation of Wells Fargo will directly benefit all our clients," added Strong Chairman and CEO Kenneth Wessels.