This excerpt taken from the C 8-K filed Jun 30, 2005.
Item 1.01 Entry into Material Definitive Agreements.
On June 23, 2005, Citigroup Inc. (Citigroup) announced that it had agreed to sell substantially all of its Asset Management business in exchange for the broker-dealer business of Legg Mason, Inc. (Legg Mason), approximately $1.5 billion of Legg Masons common and non-voting, convertible preferred shares and approximately $550 million in the form of a five-year loan facility provided by Citigroup, all pursuant to a Transaction Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference. The transaction does not include Citigroups asset management business in Mexico or Korea, its retirement services business in Latin America or its interest in the CitiStreet joint venture.
The transaction is subject to certain regulatory approvals, as well as other customary conditions to closing. Citigroup currently anticipates that the transaction will be completed in the fourth quarter. In connection with the transaction, Citigroup is seeking approval of Asset Managements mutual fund boards and shareholders. The total value of the transaction is approximately $3.7 billion and will result in an after-tax gain to Citigroup of approximately $1.6 billion, both of which are subject to adjustment.
As of June 23, 2005, Citigroup and Legg Mason also entered into a three-year Global Distribution Agreement, which is attached hereto as Exhibit 10.2 and incorporated herein by reference, under which, following the closing of the transaction, Citigroup will continue to offer Asset Managements products to its customers, will become the primary domestic provider of Legg Masons equity fund family and may offer investment products managed by other Legg Mason affiliates. These will be offered through Citigroups 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.