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Citigroup to acquire Wachovia's banking operations.

Global Banking News-30 September 2008-Citigroup to acquire Wachovia's banking operations(C)2008 ENPublishing - http://www.enpublishing.co.uk

Global Banking News - 30 September 2008(c)2005 - Electronic News Publishing - http://www.enpublishing.co.uk

Citigroup (NYSE: C) has agreed on Monday to buy Wachovia's (NYSE: WC) banking operations for USD2.1bn, making the Charlotte, NC-based bank the latest casualty of the global financial crisis.

While media reports said earlier that the two companies were in preliminary merger talks, the deal brokered by Federal Deposit Insurance Corporation (FDIC) also involved the US Federal Reserve and the Treasury Department.

Besides assuming USD53bn worth of debt, Citigroup will absorb up to USD42bn of losses from Wachovia's USD312bn loan portfolio, while the FDIC will cover remaining losses, if any. Citigroup also will issue USD12bn in preferred stock and warrants to FDIC.

Wachovia will continue to own and operate AG Edwards and the Evergreen Securities unit.

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Publication:Global Banking News (GBN)
Date:Sep 30, 2008
Words:173
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