After an intense weekend of negotiations, Charlotte-based Wachovia Corp., saddled with bad loans and a loss of investor confidence that escalated on Friday, said today it is selling its retail bank, wealth management unit and corporate and investment bank to Citigroup Inc., in a transaction facilitated by the Federal Deposit Insurance Corp.
Wachovia said the combined retail bank will be based in Charlotte, while the combined corporate and investment bank will be based in New York, Citigroup's headquarters city. A standalone company based in Charlotte, still called Wachovia, will remain that will house the Wachovia Securities brokerage firm, the Evergreen asset management arm and insurance services.
The sale likely means big layoffs for Wachovia's workforce of 120,000, which includes 20,000 in Charlotte. In a statement, Citi said it expects to realize "more than $3 billion of annualized expense synergies through the consolidation of overlapping functions." Those cost reductions would amount to about 15 percent of Wachovia's nearly $20 billion expense base in 2007, likely translating to thousands of job cuts.
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