WISCONSINREPORT.COM (09/29/08) - Another big name bank has been gobbled up by a bigger name financial system, as the United States Congress debates a measure that is aimed at relieving the pressure the financial sector is experiencing. Wachovia today announced intentions to sell its retail bank, corporate and investment bank and wealth management businesses to Citigroup. Wachovia Corporation will remain a public company with two main operating subsidiaries: Wachovia Securities, the nation's third largest brokerage firm, and Evergreen Asset Management, a leading provider of asset management services.
"During recent weeks, the financial landscape has changed significantly and presented us with unprecedented challenges," said Robert K. Steel, CEO and President of Wachovia.
"Today's announcement is the best alternative for the company, enabling a resolution on the Golden West portfolio," Steel said.
Under terms of the transaction, Citigroup will pay 2.1 billion dollars to Wachovia and assume the senior and subordinated debt of Wachovia Corporation.
The transaction is expected to close before year-end. It has been approved by directors of both companies and is subject to shareholder approval of Wachovia and the appropriate regulatory approvals.
A company spokesperson suggested that customers of both companies should continue banking as usual, and feel confident that their deposits are secure. Also, employees and vendors should continue to operate business as usual.
At this time, there are no changes to Wachovia's board of directors and two Wachovia directors will join Citigroup's board.
Wachovia Corporation will remain headquartered in Charlotte, N.C. Wachovia
Securities will continue to be headquartered in St. Louis, MO. Citigroup will headquarter the retail bank in Charlotte and the investment bank in New York.
Wachovia's investment bankers were Goldman Sachs, Perella Weinberg Partners and Wachovia Securities, and its legal advisors are Sullivan and Cromwell and Simpson Thacher and Bartlett.
Wachovia Corporation is one of the nation's largest diversified financial services companies, with assets of $812.4 billion and market capitalization of $33.5 billion at June 30, 2008.
Wachovia provides a broad range of retail banking and brokerage, asset and wealth management, and corporate and investment banking products and services to customers. Services are offered through 3,300 retail financial centers in 21 states.
There are retail financial centers from Connecticut to Florida and west to Texas and California.
Wachovia also offers nationwide retail brokerage, mortgage lending and auto finance businesses.
Globally, clients are served in selected corporate and institutional sectors and through more than 40 international offices. Our retail brokerage operations under the Wachovia Securities brand name manage more than $1.1 trillion in client assets through 14,600 financial advisors in 1,500 offices nationwide.
Online banking is available at wachovia.com, online brokerage products and services at wachoviasec.com, and investment products and services at evergreeninvestments.com.