Monday, September 29, 2008
Citigroup and Wachovia reached an agreement-in-principle for Citi to acquire Wachovia's banking operations in An FDIC-assisted transaction. The acquisition will result in a retail bank with 9.8% U.S. market deposit share and total deposits globally of $1.3 trillion. The FDIC is providing loss protection to Citi in support of transaction. In addition, Citi plans to raise $10 billion in common equity and reduce its quarterly dividend to 16 cents per share.
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. 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.