Wachovia bank has been taken over by Citigroup. New York-based Citigroup will take over Wachovia's banking operations for $2.1 billion. The latest wachovia news showed Citigroup and Wells Fargo as the final suitors for the assets of the troubled bank. The FDIC ended up interceding, and arranging the deal for Citigroup.

According to the New York Times, Citigroup will end up paying $1 per share for Wachovia. The deal does not include Wachovia Securities. Wachovia Securities will remain independent.

The Wachovia merger with Citigroup will put Citigroup on the hook for $42 billion worth of potential losses on a total loan pool estimated to be worth $312 billion. The FDIC will assume losses beyond that amount. FDIC Chairwoman Sheila Bair said the decision to take over Wachovia in this manner was a unique one.

"This morning’s decision was made under extraordinary circumstances with significant consultation among the regulators and Treasury," she said. "This action was necessary to maintain confidence in the banking industry given current financial market conditions."

Wachovia stock had been trading on Friday for $10 per share. It was as high as $52.25 earlier this year.

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