FOR IMMEDIATE RELEASE (CITIGROUP LOGO)
CITIGROUP INC. (NYSE SYMBOL: C)
JUNE 24, 2005
CITIGROUP TO SELL ASSET MANAGEMENT BUSINESS
TO RECEIVE LEGG MASON BROKER-DEALER BUSINESS AND OTHER CONSIDERATION
TRANSACTION VALUED AT APPROXIMATELY $3.7 BILLION
NEW YORK, June 24, 2005 - Citigroup today announced that it has signed a
definitive agreement under which Citigroup will sell substantially all of its
Asset Management business in exchange for the broker-dealer business of Legg
Mason, Inc. (NYSE: LM), approximately $1.5 billion of Legg Mason's common and
convertible preferred shares, and approximately $550 million in the form of a
five-year loan facility provided by Citigroup Corporate and Investment Banking.
The transaction does not include Citigroup's asset management business in
Mexico, its retirement services business in Latin America or its interest in the
CitiStreet joint venture. The total value of the transaction is approximately
$3.7 billion and will result in an after-tax gain to Citigroup upon closing of
approximately $1.6 billion, both of which are subject to adjustment.
Citigroup and Legg Mason have entered into a three-year global agreement under
which Citigroup will continue to offer its clients Asset Management's products
and in addition, inherit Legg Mason Wood Walker's position as the primary
domestic provider of Legg Mason's equity fund family, including the top
performing equity funds of Legg Mason Capital Management Inc. managed by Bill
Miller. These will be offered through Citigroup's Global Wealth Management
businesses, Smith Barney and the Citigroup Private Bank, as well as Primerica
and Citibank. All offerings will be subject to usual suitability and performance
standards.
"We have been assessing our options for the Asset Management business and have
found, in Legg Mason, a partner with an excellent product set that both
complements and enhances our existing product offering to our customers," said
Charles Prince, Chief Executive Officer of Citigroup. "In addition, we are
adding 1,354 experienced financial advisors in 127 branch offices to our Wealth
Management business. We are pleased to welcome the high quality team of
financial professionals at Legg Mason to Citigroup. Deepening our relationships
with clients is a top priority, and through this transaction, we are even better
positioned to meet their investment needs. We are continuing to focus our
resources on strengthening competitive advantages and building our leading
businesses."
"After careful review, we determined that our emphasis should continue to be on
expanding access to best-in-class investment products, rather than on
manufacturing proprietary asset management products," said Robert B. Willumstad,
President and
Chief Operating Officer of Citigroup. "As part of Legg Mason, an industry leader
solely focused on asset management, our Asset Management business will have
increased opportunities to grow. We look forward to working with the Legg Mason
team on behalf of our clients."
The transaction is expected to close during the fourth quarter subject to
certain regulatory approvals and customary closing conditions. In connection
with the transaction, Citigroup is seeking approval of Asset Management's mutual
fund boards and shareholders.
Citigroup was advised by Citigroup Corporate and Investment Banking and Skadden,
Arps, Slate, Meagher & Flom LLP.
Citigroup Conference Call
Citigroup will hold a conference call and audio Webcast to discuss the
transaction on Friday, June 24, 2005 from 8:30 a.m. (EDT) to 9:30 a.m. (EDT). To
participate on the Question and Answer line, please call 888-790-1829 (for U.S.
callers) or 210-234-0049 (for international callers) by 8:15 a.m. (EDT) on
Friday, June 24. You will need to give the answering coordinator your name, the
firm you represent, and passcode: ANNOUNCEMENT. To participate on the
Listen-Only line, please call 888-889-1961 (for U.S. callers), or 773-756-4706
(for international callers) by 8:15 a.m. (EDT) on Friday, June 24. Please use
passcode: 258455.
WEBCAST INSTRUCTIONS: To participate in the Citigroup Webcast (which will be
listen-only), go to http://www.citigroup.com/citigroup/fin and click on the link
under the announcement entitled Citigroup to Sell Asset Management Business. You
will need to download Windows Media Player prior to the event in order to view
the slides and hear the audio. A replay of the Webcast will be made available. A
copy of the presentation and press release will be available at:
www.citigroup.com/citigroup/fin.
TELECONFERENCE REPLAY INSTRUCTIONS: A continuous telephone replay will be
available beginning Friday, June 24, 2005 at approximately 11:00 a.m. (EDT) and
continuing through 10:00 p.m. (EDT), Friday, July 8, 2005. To listen to the
replay, please dial 866-346-2430. Callers from outside the U.S. may listen to
the replay by dialing 203-369-0007. There is no passcode.
About Citigroup
Citigroup, the leading global financial services company, has some 200 million
customer accounts and does business in more than 100 countries, providing
consumers, corporations, governments and institutions with a broad range of
financial products and services, including consumer banking and credit,
corporate and investment banking, insurance, securities brokerage, and asset
management. Major brand names under Citigroup's trademark red umbrella include
Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Travelers Life
and Annuity. Additional information may be found at www.citigroup.com.
Certain statements in this document are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act. These statements are
based on management's current expectations and are subject to uncertainty and
changes in circumstances. Actual results may differ materially from those
included in these statements due to a variety of factors. More information about
these factors is contained in Citigroup's filings with the Securities and
Exchange Commission.
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Media Contacts: Leah Johnson 212-559-9446
Shannon Bell 212-793-6206
Investors: Art Tildesley 212-559-2718
Fixed Income: John Randel 212-559-5091