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U.S. markets recover from steep losses
CHARLOTTE, N.C., Sept. 30 (UPI) -- The city of Charlotte, N.C. was pondering its fate Tuesday after learning its once powerful bank, Wachovia Corp., was swallowed up by Citigroup Monday.
The latest in a series of stunning financial institution failures, Wachovia's peak value of $100 billion with share values at $60 in 2006, had tumbled to less than $4 billion when Citigroup purchased most of its operations for $1 a share, The Charlotte Observer reported Tuesday.
"It's very, very much a body blow to the city," retired Bank of America Chairman Hugh McColl Jr. told the Observer.
Citigroup Chief Executive Officer Vikram Pandit claimed the it was "essential" for Wachovia "to have a strong presence in Charlotte." But, Citigroup also said the acquisition included $3 billion in annual savings due to "overlapping functions" of the two companies.
Wachovia kept its brokerage, insurance and Evergreen fund management business in the deal. But, how many jobs will be lost from the acquisition of the bank is uncertain.
Before Monday, 20,000 of the company's workforce of 120,000 were employed in Charlotte, the Observer said.
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