Citigroup to buy Wachovia

Another day, another bank "failure." Citigroup will buy Wachovia for $1 a share, in a deal that was brought about by regulators. Citigroup's shareholders may not be applauding, seeing as the bank took an immediate loss of $30 billion. It has agreed to absorb up to $42 billion in losses. The government will absorb additional losses that stem from the $312 billion portfolio of Wachovia's most troubled loans. To shore up its position, Citigroup will sell $10 billion worth of common stock and slash its quarterly dividend to 8 cents from 16 cents. This is essentially a non-failure failure in a sense--yet another. True, bank branches will remain open. Depositors are protected. But let's face it, the bank was tottering. Were it not for deal-making intervention, it would have really ended ugly. Really ugly. So who's next?

For more:
- here's a Washington Post article

Related Articles:
Wachovia in talks with Citigroup
Wachovia turnaround underway?