Citigroup buys parts of Wachovia

by Richard Kilner

Story link: Citigroup buys parts of Wachovia

Troubled US bank Wachovia has announced that it is to sell its retail bank, corporate and investment bank and wealth management businesses to its larger rival, Citigroup.

However, Wachovia will remain a functioning business, as a public body with subsidiaries Wachovia Securities and Evergreen Asset Management.

Under the agreement, the firm will receive $2.1bn from Citigroup, which will take on Wachovia Corporation’s senior and subordinated debt.

The deal, which is expected to be complete prior to next year, already has the green light from directors but still requires shareholder approval.

Customers, vendors and employees are all advised by Wachovia to continue business as usual, with an assurance that deposits remain safe.

Robert K. Steel, chief executive officer and president of Wachovia, has explained that over the last few weeks the financial landscape has changed dramatically, presenting the firm with unprecedented challenges.