Well it seems Citigroup has decided that even with the help of F.D.I.C. that it just did not want to take on even part of the bad loans/debt Wachovia had from its' earlier mergers. According to the NYTimes , Wells Fargo gets to have it all and create a $1.42 Trillion company stretching coast to coast.
Citigroup wants to sue Wells Fargo for $60 Billion for interfering, but may not be able to because:
"... there is the issue of the bailout legislation signed into law last week by President Bush. A provision in the legislation appears to invalidate bank acquisitions “in connection with any transaction” in which the F.D.I.C. uses its authority. It is not clear what that “in connection with” language means: Citigroup has argued that it means that the deal between Wachovia and Wells Fargo was prohibited, while Wachovia is likely to argue that the bailout provision invalidated its agreement with Citigroup."

Lawyers Start your engines!!