I was finally personally affected by the credit crunch today. There shouldn’t be any real repercussions for me but my bank here in the US, Wachovia, was bought out by Citigroup today in a $2.1 Billion deal. Apparently the bank “did not fail“.
From the FDIC press release:
“For Wachovia customers, today’s action will ensure seamless continuity of service from their bank and full protection for all of their deposits.” said FDIC Chairman Sheila C. Bair. “There will be no interruption in services and bank customers should expect business as usual.”
And Wachovia’s press release in full (although I haven’t received anything from the bank):
September 29, 2008
Wachovia Announces Bank Subsidiary Divestitures to Citigroup
Wachovia Corporation to become a focused leader in retail brokerage and asset management.
CHARLOTTE, NC—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.”
Under terms of the transaction, Citigroup will pay $2.1 billion 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.
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 Corp. will remain headquartered in Charlotte, NC. 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 & Cromwell and Simpson Thacher & Bartlett.
Just in case you were wondering, it wasn’t my fault! I owe ‘em nowt.
