Citigroup Withdraws From Wells Fargo Negotiations

9 10 2008

Citigroup said late Thursday that it will not try to block a merger between Wachovia and Wells Fargo, but that it would continue to seek $60 billion in legal damages after the Charlotte-based bank spurned a $2.2 billion deal proffered by Citigroup at the government’s behest.

In a lawsuit filed in New York state court on Monday — but put on hold because of the now recently ended discussions — Citigroup said that it was seeking at least $60 billion in compensatory and punitive damages.

The decision by Citigroup to withdraw from discussions with Wells Fargo marks the resumption of a court battle between the two big banks, one that began in a flurry of hurried motions late last week. Last week, Citigroup agreed to buy Wachovia’s banking operations for about $2.2 billion, in an eleventh-hour deal brokered by the federal government.


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