Wachovia Bank acquired by Citigroup

Update: Wachovia Bank fell from $10 at Friday's closing to $1.84 at closing on Monday.

According to the San Antonio Business Journal:

"Citigroup Inc. has agreed to acquire Wachovia's banking operations, according to the Federal Deposit Insurance Corp."

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

"Under the agreement, Citigroup will absorb up to $42 billion of losses on a $312 billion pool of loans."

"The FDIC will absorb losses beyond that."

"Citigroup (NYSE:C) has granted the FDIC $12 billion in preferred stock and warrants to compensate the federal regulator for bearing this risk."