Citigroup Inc. (NYSE: C)
September 29, 2008
Citi and Wachovia Reach Agreement-in-Principle for Citi to Acquire Wachovia's Banking Operations in An FDIC-Assisted Transaction
Will create leading U.S. retail bank with 9.8% U.S. market deposit share, and total deposits globally of $1.3 trillion
FDIC provides loss protection to Citi in support of transaction
More than $3 billion of estimated annualized expense synergies expected by year three through consolidation of overlapping functions
Citi to raise $10 billion in common equity and reduce quarterly dividend to 16 cents per share to maintain strong capital position
New York – Citi (NYSE: C) today announced it has reached an agreement–in-principle to acquire all of the banking subsidiaries of Wachovia Corporation (NYSE: WB), creating the largest U.S. bank by total deposits.
Wachovia will remain a public company and retain its asset management, retail brokerage, and certain select parts of its wealth management businesses, including the Evergreen and Wachovia Securities franchises. Going forward, Wachovia expects to have adequate capital to support its remaining businesses, an appropriate allocation of tangible equity, and certain tax assets that will be recognized immediately.
Under the terms of the agreement-in-principle, Citi will pay Wachovia approximately $2.16 billion in stock and assume Wachovia senior and subordinated debt, totaling approximately $53 billion.