Citi’s share price hit a record high after a $6.2 billion deal with a $2.9 billion takeover
Next Big Futures article Citi shares rose by more than 4% after the bank reported its earnings today.
The bank said it would sell its stake in U.S. savings and loan company AmerisourceBergen to the bank’s parent, Citi Group, for $2 billion, marking the largest acquisition in its history.
The sale price of $2,979 per share was more than $10 billion higher than the offer the bank made earlier this year to acquire a majority stake in AmerisourcesourceBerge.
The deal also gives Citi its largest-ever shareholder in the bank.
Citi said it expects to pay $2 million a share in cash for AmerissourceBergen’s stock and about $4.2 million in dividends, which would bring its cash flow to $16.2 trillion.
AmerisOURCEBerge is one of the world’s largest online financial companies, serving as a gateway for consumers, banks, and businesses to trade securities and to transfer funds.
It also manages a vast network of financial advisers, financial products, and financial technology.
AmeriSourceBerge’s financials are projected to grow at a 7% annual rate through 2021.
The stock rose by nearly 10% in premarket trading on Tuesday.
The buyback was Citi stock’s largest ever, eclipsing the $6 billion offer that the bank received in January 2017.
In the most recent deal, the bank said that it had reached a $1.9 trillion agreement to acquire the company’s $2-billion stake in the U.K. bank HSBC Holdings PLC, which has more than 40 million customers.
Ameribank, the largest bank in the United States, is expected to take over AmerisSourceBergen in 2021, after buying its stake from Citi.
