Citigroup Inc. (NYSE: C)
October 09, 2008
Citi Ends Negotiation with Wells Fargo on
Wachovia Transaction
Citi continues to seek compensatory and punitive damages for bad faith breach of contract and tortious interference
Company remains well-capitalized and continues to execute on its business and risk management strategy
New York – Citi announced today that it had reached no agreement with Wells Fargo following several days of discussions about matters related to Wachovia. The dramatic differences in the parties' transaction structures and their views of the risks involved made it impossible to reach a mutually acceptable agreement.
Citi said: "We are proud to have been part of an historic transaction that was supported by all of the federal banking agencies and the Secretary of the Treasury, after consultation with the President, and that we carefully designed to avoid systemic stress and to advance the interests of our shareholders."
Citi's transaction, which it remains willing to complete, protected Wachovia's holding company debt and its subsidiary banks, while limiting the risk to Citigroup and generating value for its shareholders. The transaction also preserved substantial value for Wachovia's shareholders and other holding company stakeholders without exposing Citigroup to Wachovia holding company liabilities it declined to assume. Finally, Citigroup agreed to pay $12 billion to the FDIC, and to incur up to $42 billion of losses, in exchange for the contingent loss protection the FDIC agreed to provide.