Citigroup swallows Wachovia
Citigroup swallows Wachovia
Citigroup will buy all of the banking subsidiaries of Wachovia Corp., Colorado’s fourth-largest bank by deposits, for $2.16 billion in stock, Citi said Monday.
The deal was assisted by the Federal Deposit Insurance Corp. (FDIC), which asserted in a statement Monday that Charlotte, N.C.-based Wachovia (NYSE: WB) didn’t fail.
“For Wachovia customers, today’s action will ensure seamless continuity of service from their bank and full protection for all of their deposits,” FDIC Chairman Sheila Bair said in a statement. “There will be no interruption in services and bank customers should expect business as usual.”
Wachovia will remain a public company and will keep its asset management, retail brokerage, and certain parts of its wealth management businesses, including the Evergreen and Wachovia Securities franchises.
New York-based Citi (NYSE: C) will acquire more than $700 billion of assets of Wachovia’s banking subsidiaries, and related liabilities. The FDIC will guarantee approximately $312 billion of mortgage-related and other Wachovia assets. Under the terms of the agreement, Citi will pay Wachovia approximately $2.16 billion in stock and assume Wachovia senior and subordinated debt, totaling approximately $53 billion.
Wachovia entered the Colorado market after it paid an estimated $25 billion for Golden West Financial Corp., the parent company of World Savings Bank in 2006. Wachovia continued to operate World Savings Bank separately for about a year; in October 2007 it officially put Wachovia signage on the 34 former World Savings Bank branches in Colorado.
Golden West was an active lender during the subprime mortgage boom; its hallmark product was a “pick-a-payment” option adjustable rate mortgage.
Related Posts
- Good Debt vs. Bad Debt
- Internet Payday Lenders charged by the FTC
- Wells to get Big Tax Break in Wachovia Deal
- Citigroup swallows Wachovia
The dramatic statements by Wachovia about its customers.
Such details of the deal were unlikely to have waited!
http://tubedirect.net/index.php?q=Wachovia-interview-CNN
all this… Personally, I do not like it