Citibank 2009 Annual Report Download - page 154

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Asia
Acquisition of Bank of Overseas Chinese
In 2007, Citigroup completed its acquisition of Bank of Overseas Chinese
(BOOC) in Taiwan for approximately $427 million. BOOC offers a broad
suite of corporate banking, consumer and wealth management products and
services to more than one million clients through 55 branches in Taiwan.
This transaction will strengthen Citigroup’s presence in Asia, making it
the largest international bank and thirteenth largest by total assets among
all domestic Taiwan banks. Results for BOOC are included in Citigroup’s
Asia Regional Consumer Banking and Securities and Banking businesses
from December 1, 2007 forward.
EMEA
Acquisition of Egg
In 2007, Citigroup completed its acquisition of Egg Banking plc (Egg), one
of the U.K.’s leading online financial services providers, from Prudential
PLC for approximately $1.39 billion. Egg offers various financial products
and services including online payment and account aggregation services,
credit cards, personal loans, savings accounts, mortgages, insurance and
investments. Results for Egg are included in Citi Holdings’ LCL business from
May 1, 2007 forward.
Purchase of 20% Equity Interest in Akbank
In 2007, Citigroup completed its purchase of a 20% equity interest in Akbank
for approximately $3.1 billion, accounted for under the equity method of
accounting. Akbank, the second-largest privately owned bank by assets in
Turkey, is a premier, full-service retail, commercial, corporate and private
bank.
Sabanci Holding, a 34% owner of Akbank shares, and its subsidiaries have
granted Citigroup a right of first refusal or first offer over the sale of any of
their Akbank shares in the future. Subject to certain exceptions, including
purchases from Sabanci Holding and its subsidiaries, Citigroup has otherwise
agreed not to increase its percentage ownership in Akbank.
DIVESTITURES
The following divestitures occurred in 2008 and 2009 and do not qualify as
Discontinued operations:
Sale of Phibro LLC
On December 31, 2009 the Company sold 100% of its interest in Phibro
LLC to Occidental Petroleum Corporation for a purchase price equal to
approximately the net asset value of the business.
The decision to sell Phibro was the outcome of an evaluation of a variety
of alternatives and is consistent with Citi's core strategy of a client-centered
business model. The sale of Phibro does not affect Citi's client-facing
commodities business lines, which will continue to operate and serve the
needs of Citi's clients throughout the world.
Sale of Citi’s Nikko Asset Management Business
and Trust and Banking Corporation
On October 1, 2009 the Company completed the sale of its entire stake in
Nikko Asset Management (“Nikko AM”) to the Sumitomo Trust and Banking
Co., Ltd. (“Sumitomo Trust”) and completed the sale of Nikko Citi Trust and
Banking Corporation to Nomura Trust & Banking Co. Ltd.
The Nikko AM transaction was valued at 120 billion yen (U.S. $1.3 billion
at an exchange rate of 89.60 yen to U.S. $1.00 as of September 30, 2009).
The Company received all-cash consideration of 75.6 billion yen (U.S. $844
million), after certain deal related expenses and adjustments, for its 64%
beneficial ownership interest in Nikko AM. Sumitomo Trust also acquired the
beneficial ownership interests in Nikko AM held by various minority investors
in Nikko AM, bringing Sumitomo Trust’s total ownership stake in Nikko AM
to 98.55% at closing.
For the sale of Nikko Citi Trust and Banking Corporation, the Company
received all-cash consideration of 19 billion yen (U.S. $212 million at an
exchange rate of 89.60 yen to U.S. $1.00 as of September 30, 2009) as part of
the transaction, subject to certain post-closing purchase price adjustments.
Retail Partner Cards Sales
During 2009, Citigroup sold its Financial Institutions (FI) and Diners Club
North America credit card businesses. Each of these businesses are reflected in
Local Consumer Lending. Total credit card receivables disposed of in these
transactions was approximately $2.2 billion.