Was $2.16 billion the best deal for Wachovia?

Did Wachovia chief executive Bob Steel get the best deal? Did he have a choice? With the Charlotte bank set to sell most of its operations to Citigroup for $2.16 billion, some employees and shareholders are wondering why the once vaunted institution is selling for a relatively paltry sum, even amid a global credit crisis.

For what it's paying, New York-based Citi gets $700 billion in assets and more than $400 billion in deposits, but it's also on the hook for $42 billion in potential loan losses. The Federal Deposit Insurance Corp. will cover any losses beyond that. Left behind will be a company called Wachovia that houses brokerage and asset management businesses.

For Steel's part, he may have been forced into a marriage by regulators in a bid to avoid “serious adverse effects” on the economy and the financial system, as the Federal Deposit Insurance Corp. said Monday. The FDIC took over the sale process Sunday after San Francisco-based Wells Fargo passed, the Wall Street Journal reported Tuesday.

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Shareholders bitter after decades of trust