May 26, 2004 — Wells Fargo (WFC) said Wednesday that it has agreed to acquire Strong Financial Corp., which offers 70 mutual funds.
Terms of the deal were not disclosed. The Wall Street Journal reported Wednesday that Wells Fargo could pay as much as $700 million for Strong Capital, which oversees $34 billion in assets.
Strong Capital and its founder, Richard Strong, agreed last week to pay a total of $140 million to settle fraud charges stemming from improper trading in its funds. The settlement cleared the way for Wells Fargo to buy the Menomonee, Wis.-based firm.
A spokesman for Strong Funds said Wells Fargo is expected to consolidate some of the funds, but there are no “immediate plans” to do this. Wells Fargo and Strong Capital also said Strong Financial’s “key investment teams” will join Wells Fargo and continue managing their funds.
Following the completion of the deal, Wells Fargo, which offers its own lineup of funds, expects to have $103 billion in assets under management in its funds, which would make it one of the top 20 U.S. fund companies.
Richard Strong, who owns about 90% of Strong Capital, resigned as the company’s chairman, chief executive and head of investments in December. Mr. Strong also agreed to a lifetime ban ban from the securities industry as part of the settlement with federal and state securities regulators.
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