Citigroup Buys Wachovia Assets

Citigroup Inc will purchase Wachovia Corp's banking operations. The deal will give the government a stake in one of the largest banks in the nation. The FDIC made the announcement on Monday morning.

Citigroup Inc has agreed to buy most of the banking assets owned by Wachovia Corporation. The deal also gives the US government a stake.

The financial deal was facilitated by the Federal Deposit Insurance Corp, otherwise known as the FDIC. Wachovia depositors will be fully protected and no cost to the Deposit Insurance Fund is expected.

"Wachovia did not fail; rather, it is to be acquired by Citigroup Inc on an open bank basis with assistance from the FDIC," the FDIC said in a statement.

Citibank shares were up about 3 percent to $20.54.

The banking deal will allow Citigroup to buy Wachovia's five depository institutions and assume its senior and subordinated debt. Wachovia will retain ownership of its retail brokerage unit, AG Edwards, and its assets-management division, Evergreen.