The agreement covers all related Citi staff, with approximately 5,000 consumer bank and supporting employees expected to transfer to UOB upon close of the proposed transaction. UOB will pay Citi cash consideration for the net assets of the acquired businesses, subject to customary closing adjustments, plus a premium of S$915 million [US$690 million].
Upon closing, Citi expects the transaction to result in the release of approximately US$1.2 billion of allocated tangible common equity, as well as an increase to tangible common equity of over US$200 million. As previously announced, Citi's exit from its consumer franchises in 13 markets across Asia Pacific and EMEA is expected to release approximately US$7 billion of allocated tangible common equity over time.
Peter Babej, Citi Asia Pacific CEO, said, "We are excited to announce this transaction with UOB, a leading pan-Asian institution. We are confident that UOB, with its strong culture and broad regional ambitions, will provide excellent opportunities and a long-term home for our consumer banking colleagues in Indonesia, Malaysia, Thailand and Vietnam. Focusing our business through these actions will facilitate additional investment in our strategic focus areas, including our institutional network across Asia Pacific, driving optimal returns for Citi."
Mark Mason, Citi CFO said, "The sale of these four consumer markets, along with our previously announced transactions, demonstrate our sense of urgency to execute our strategic refresh. We are committed to working in the best interests of our shareholders by focusing our resources on businesses that can deliver growth, as well as increasing the capital we return to shareholders over time."
Tibor Pandi, Country Head, Citi Thailand said "This transaction represents a positive outcome for our clients, our colleagues and our firm. Citi is committed to a seamless transaction, and during the transition to closing, there will be no change in service provided to our consumer banking and wealth customers. Thailand remains a key market for Citi globally and we remain committed and focused on serving institutional clients locally, regionally, and globally as we have for over half a century."
UOB was selected by Citi following an extensive and competitive auction process. Citi is committed to a seamless transaction, and during the transition to closing, there will be no change in service provided to our consumer banking and wealth customers. Completion of the divestitures in each country will not be conditional on the completion of the divestitures in the other countries but will be conditional on obtaining regulatory approvals relevant to each country. It is estimated that completion will take place between mid-2022 and early 2024, depending on the progress and outcome of the regulatory approval process.
Citi's Banking, Capital Markets and Advisory Group is acting as exclusive financial advisor to Citi in respect of the transaction.
Source: JC&CO Communications