Davis Polk and Sullivan Lead on Citi's Wachovia Buyout

Sofia Lind

Legal Week

September 29, 2008

Four leading Wall Street firms have advised on the latest grand-scale banking rescue as Wachovia joins the ranks of banking giants to fall victim to the credit crunch.

Davis Polk & Wardwell and Sullivan & Cromwell took the lead roles on Citi's acquisition of Wachovia's banking operations for $2.16 billion. Citi will take on around $53 billion-worth of Wachovia debt in the rescue deal, backed by the U.S. government.

Sullivan advised Wachovia on the deal, while Davis Polk advised Citi, led by M&A partners John Ettinger and Phillip Mills and financial institutions partner Randall Guynn.

Citi will pay the $2.16 billion in stock, with Wachovia to remain a public company and retain its asset management, retail brokerage and certain parts of its wealth management business.

Skadden, Arps, Slate, Meagher & Flom also took a role advising Citi with a team including New York M&A partner Eric Friedman and corporate finance partner Greg Fernicola.

Cleary Gottlieb Steen & Hamilton is counsel to the underwriters in an announced $10 billion common stock offering in connection with the acquisition. It is also acting as disclosure counsel to Citi, led by New York partners Alan Beller and Jeff Karpf.

The bank rescue deal came hot on the heels of JPMorgan's purchase of Washington Mutual assets on Sept. 26, following the U.S. government seizing the savings and loan association on Sept. 25.

Sullivan & Cromwell also took a lead on that deal, led by Chairman Rodgin Cohen and flanked by finance and M&A partner Mitch Eitel. Simpson Thacher & Bartlett was understood to have taken the lead mandate advising Washington Mutual.