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News > Deals
Citibank to buy EAB
February 12, 2001: 6:57 p.m. ET

ABN AMRO sells L.I. bank to Citigroup unit for $1.6B plus $350M in stock
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NEW YORK (CNNfn) - Citibank N.A. agreed Monday to acquire European American Bank, a unit of ABN AMRO Bank N.V., for $1.6 billion plus the assumption of $350 million in preferred stock.

Citibank, the North American banking arm of Citigroup, did not disclose further information of the transaction. The transaction is still subject to customary bank regulatory approvals, the companies said in statement.

The purchase, which is expected to close in mid-2001, will immediately add to Citigroup's earnings.

graphicNew York-based Citigroup (C: Research, Estimates), the largest bank in the United States, has been absent from the acquisition scene of late. The sale is the latest transaction for Netherlands-based ABN AMRO (ABN: Research, Estimates), which in January agreed to buy rival ING Group's U.S. investment banking unit for $275 million in a bid to build up its securities business.

The purchase will make Citibank the leading bank, in terms of deposits, on Long Island, where it now has 27 locations. Uniondale, N.Y.-based EAB is a state-chartered bank with $11.5 billion in deposits and $15.4 billion in assets.

"EAB also brings to Citibank a very strong small-and middle-market commercial lending business and a solid leasing business," said Marge Magner, head of Citigroup's domestic retail operations. "Citibank, as a result of its efforts to transform its branches into true financial service centers, can offer an expanded array of financial products and services to EAB's retail customers, assisting them with a full range of financial needs. "

EAB locations will bear the Citibank brand name immediately after the deal is consummated.

Shares for Citigroup rose $1.40 to close at $55.45 Monday, while American depositary receipts (ADRs) for ABN AMRO gained 44 cents to $24.64. graphic





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