Citigroup will become the United States’ largest bank by deposits after agreeing to acquire all banking operations of failing bank Wachovia.
Under the terms of the agreement, Citi will pay Wachovia approximately US$2.2 billion (A$2.7 billion) in stock and assume Wachovia senior and subordinated debt, totalling approximately US$53 billion (A$66 billion).
The US government will also obtain a share in Citigroup as part of the deal in exchange for guaranteeing a large portion of Wachovia’s distressed housing-related assets.
Citi will now hold 9.8 per cent of the US market’s deposits and global deposits totalling US$1.3 trillion (A$1.6 trillion).
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