Wells Fargo (NYSE: WFC) has started reaching out to private equity firms to assess the industry’s acquisitive appetite for the embattled US banking giant’s insurance brokerage business, which could command a $2 billion bid, according to Bloomberg. Although Wells Fargo has yet to set a timeline for its auction, the bank has slated the unit for sale as part of its current cost-cutting strategies aimed at boosting its bottom line by dropping underperforming assets.
Wells Fargo has picked the right spot for shopping around its insurance brokerage. Insurers make appealing targets for PE firms, which need the cash they generate to service debt loads taken on in buyouts. For proof, look no further than recent acquisition trends among financial acquirers: