Citigroup Inc., the world's largest financial services company, said Monday that it had agreed to buy Washington Mutual Inc.'s consumer finance unit for $1.25 billion, expanding its consumer lending business.
Buying Tampa, Fla.-based Washington Mutual Finance Corp. would give Citigroup 409 Washington Mutual Finance offices in 25 states, primarily in the Southeast and Southwest, including California.
Washington Mutual Finance has more than 2,300 employees and had assets of about $4 billion at the end of September.
Citigroup said it expected the deal to close in the first quarter of next year and add to its earnings in 2004.
The deal underscores the rapid expansion of Citigroup's vast consumer franchise, which includes credit cards and mortgage loans.
The acquisition will boost Citigroup's distribution network by giving it access to about 65 "entirely new" markets and add more than 90 new branches in key states such as Texas, Florida and California, Citigroup said.
In a separate news release, Seattle-based Washington Mutual said the deal aided its goal of realigning its business around middle-class consumers and commercial clients.
Washington Mutual is the largest savings and loan in the United States and a major presence in the California market.
In May 2002, Citigroup agreed to purchase California Federal Bank parent Golden State Bancorp of San Francisco for $5.8 billion in cash and stock to expand its thriving consumer operation.