ING to pay $900m for CitiStreet
02 May 2008 | 2144 views | 0
Citigroup (NYSE: C) and State Street Corporation (NYSE: STT) today announced that they have entered into a definitive agreement to sell CitiStreet, a benefits servicing business, to ING Group in an all-cash transaction valued at $900 million.
CitiStreet is a joint venture formed in 2000, which is owned 50 percent each by Citi and State Street. The acquisition is expected to close, pending customary closing conditions, by the end of the third quarter of this year.
CitiStreet, a leading benefits services company in the United States and Australia, provides a range of recordkeeping and administrative services to more than 16,000 plans and 12 million participants. Headquartered in Quincy, Massachusetts, CitiStreet has more than $262 billion in assets under administration as of March 31, 2008 and approximately 3,700 employees.
"CitiStreet is an industry leader, but retirement plan record keeping and administrative services are not strategic priorities for us," said Charles D. Johnston, President of Citi Global Wealth Management. "Smith Barney remains committed to serving corporate and business clients with retirement plans and other institutional offerings and we will work closely with ING and State Street to ensure an orderly transition for clients and employees."
"In the eight years since its launch, CitiStreet has had steady growth and become a leading benefits servicing provider," said Ronald E. Logue, Chairman and Chief Executive Officer, State Street Corporation. "This transaction recognizes the strong business we built while enabling us to focus resources on businesses that are more closely aligned with our long-term strategy."
Today's action is consistent with Citi CEO Vikram Pandit's focus on divesting non-core assets and strategically reallocating capital throughout the organization. The action enables State Street to more effectively pursue opportunities that will continue to build on its global franchise focused on serving institutional investors.
Citi is advised on this transaction by its Institutional Clients Group and State Street is advised by Goldman, Sachs & Co.