KorAm is the sixth largest commercial bank in Korea, with 222 domestic branches and total assets of KRW 43.0 trillion ($36.8 billion). The businesses of Citigroup and KorAm, taken together, will create the fifth largest financial business in Korea, based on revenues. Citigroup expects that the transaction would be accretive to its 2004 earnings. The transaction, including the making of the tender offer, is subject to customary conditions, including receipt of all required regulatory approvals, and the successful tender of at least 43.4% of KorAm's shares so that together with the 36.6% to be acquired from the consortium, Citigroup will own at least 80% of KorAm's outstanding shares.
"Korea is a strategic priority for Citigroup," said Sir Deryck Maughan, Chairman and Chief Executive Officer, Citigroup International. "The combination of KorAm and Citigroup will create a leading local bank with global capabilities. Together, we will be able to better serve our clients and contribute to Korea's growth and development. Having established ourselves in Korea in 1967, we are deeply committed to the country, which is one of the fastest growing economies in the world, with a gross domestic product of more than $500 billion and a projected GDP growth rate of more than 6% in 2004. We see this transaction as part of a broader strategy to provide greater access to Citigroup's world-class products and services in attractive and growing markets, while providing new opportunities for employees and superior performance for our shareholders."
"Through this transaction, we are providing shareholders attractive value for their investment, customers convenient access to a full array of world class products and services, and employees exciting new opportunities for career development," said Yung-Ku Ha, Chairman and Chief Executive Officer of KorAm. "Citigroup is an ideal partner, one which is best positioned to maximize synergy between our two companies. It is the world's premier global financial institution and a strategic investor that has an in-depth understanding of Korea. We look forward to the successful completion of this transaction and to working together with Citigroup to create what I know will be the country's finest financial institution."
Michael ByungJu Kim, President of Carlyle Asia, said, "The KorAm management team and employees have built a world-class financial institution, creating exceptional value for its customers and shareholders. We at Carlyle, JPMorgan Corsair and the consortium are proud to have made a contribution to the development of KorAm and the banking sector in Korea."
"Citigroup's decision to acquire KorAm is a significant vote of confidence in the Korean economy," said D.T. Ignacio Jayanti, President of Corsair. "This transaction represents a strong validation of the Carlyle-Corsair consortium's investment thesis, and speaks to the potential for private equity to play a constructive role in the restructuring of banking systems globally."
KorAm has a deposit base of KRW 25 trillion ($21 billion) and local branch market share of 7.6 percent based on revenue. It services more than 6 million retail banking customers through 222 domestic branches and 471 automatic teller machines. Its client base includes approximately 10% of the affluent population of Korea. KorAm's credit card operation services 3.3 million card accounts. KorAm's corporate and investment banking businesses services 400 top tier local corporations and more than 5,300 small and mid-size enterprises.
About Citigroup Involvement in Korea**
Citigroup was one of the first foreign banks to establish a presence in Korea. With local assets of KRW 10.4 trillion ($8.9 billion) and KRW 355 billion ($304 million) in revenues, Citigroup Korea serves a broad base of corporate and consumer businesses. Citigroup Korea has 799 employees and 12 consumer branches in 3 cities, as well as a longstanding tradition of active community involvement and support in Korea.
Citigroup (NYSE: C), the preeminent global financial services company which has 200 million customer accounts and does business in more than 100 countries, provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage, and asset management. Major brand names under Citigroup's trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Travelers Life and Annuity. Additional information may be found at www.citigroup.com.
The Carlyle Group is a global private equity firm with more than $17.5 billion under management. Carlyle invests in buyouts, venture, real estate, high yield, and turnarounds in North America, Europe, and Asia. Since 1987, the firm has invested $10.4 billion of equity in 306 transactions. The Carlyle Group employs more than 500 people in 14 countries. Carlyle Asia Partners is a $750 million fund that makes management-led buyout investments in the Asia-Pacific region. Since 1999, the fund has made several major investments, including Taiwan Broadband Communications, Pacific China Department Stores and Boto International. Visit www.carlyle.com for additional information.
Corsair is a private equity investment partnership established in 1993 in affiliation with J.P. Morgan. The fund invests exclusively in financial institutions worldwide. Previous banking investments include Foreningssparbanken (also known as Swedbank), the largest savings bank in Scandinavia; Unibanco, the third largest Brazilian private sector bank; and Bank Handlowy, the oldest Polish banking institution which Corsair sold to Citigroup in 2000. For more information, visit www.jpmorgan.com/corsair.
Certain statements in this document are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors. More information about these factors is contained in Citigroup's filings with the Securities and Exchange Commission. * U.S. dollar amounts based on KRW 1,167 = U.S. $1.00, the exchange rate as of February 20, 2004. ** KorAm's numbers are under Korean GAAP and Citigroup's are under U.S. GAAP.