Realizing that it had been beaten like so many others, Wachovia Corp. sold its banking operations to Citigroup on Monday, for the tidy sum of $2.2 billion, or one dollar per share. It wasn’t a total victory for Citigroup, however, as the company expects to sustain heavy losses in excess of $42 billion in order to write down Wachovia’s damaged $312 billion loan portfolio. The deal was brokered by the Federal Deposit Insurance Corporation. To calm to the fears of Wachovia customers, the FDIC released this statement: “All depositors are fully protected and there is expected to be no cost to the Deposit Insurance Fund. Wachovia did not fail; rather, it is to be acquired by Citigroup Inc. on an open-bank basis with assistance from the FDIC.”
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