Citigroup buys Wachovia bank assets for $2.2B
Posted: Mon Sep 29, 2008 7:49 am
Citigroup will acquire the banking operations of Wachovia for $2.2 billion in an all-stock deal, following much speculation over the weekend about the fate of the nation's fourth-largest bank.
Citigroup, the nation's largest bank based on assets, also announced it would raise $10 billion through a sale of common stock and that it would slash its quarterly dividend yet again, cutting it in half to 16 cents a share to preserve capital.
As part of the deal, Citigroup will acquire Wachovia's massive deposit network, as well as over $300 billion worth of Wachovia's loan portfolio and about $53 billion in the company's debt.
Citigroup said it will absorb up to $42 billion of losses on those loans, while the Federal Deposit Insurance Corporation will be on the hook for anything beyond that.
The FDIC noted that Wachovia did not qualify as a failed bank, unlike Washington Mutual, which collapsed last Thursday, only to be subsequently purchased by JPMorgan Chase (JPM, Fortune 500).
http://money.cnn.com/2008/09/29/news/co ... 2008092908
Citigroup, the nation's largest bank based on assets, also announced it would raise $10 billion through a sale of common stock and that it would slash its quarterly dividend yet again, cutting it in half to 16 cents a share to preserve capital.
As part of the deal, Citigroup will acquire Wachovia's massive deposit network, as well as over $300 billion worth of Wachovia's loan portfolio and about $53 billion in the company's debt.
Citigroup said it will absorb up to $42 billion of losses on those loans, while the Federal Deposit Insurance Corporation will be on the hook for anything beyond that.
The FDIC noted that Wachovia did not qualify as a failed bank, unlike Washington Mutual, which collapsed last Thursday, only to be subsequently purchased by JPMorgan Chase (JPM, Fortune 500).
http://money.cnn.com/2008/09/29/news/co ... 2008092908
