Citigroup to Acquire Wachovia

The Federal Deposit Insurance (FDIC) announced earlier today that Citigroup will acquire the banking operations of Wachovia, according to The Wall Street Journal.

The Federal Reserve Board and the U.S. Treasury Department reached a deal with the FDIC. FDIC spokesperson Shelia Bair said, “There will be no interruption in services and bank customers should expect business as usual.”

Citigroup will acquire most of Wachovia’s assets and liabilities, the FDIC said to WSJ, including the five depository institutions and senior and subordinated debt issued by Wachovia. Wachovia will continue to own AG Edwards and Evergreen.

Citigroup will absorb $42 billion Wachovia losses on a $312 billion pool of loans and the FDIC will absorb any further losses.