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Daily Real Estate News | May 13, 2004 |
Citigroup to Acquire Principal Financial's Mortgage Operations
Citigroup Inc. will pay $1.26 billion to acquire Principal Financial Group Inc.'s mortgage-banking operations as a means of expanding its servicing business at a time when higher interest rates could weaken demand for purchase loans.
The deal calls for Citigroup to shell out $970 million for Principal's assets, $137 million for a so-called "franchise premium," and $120 million for loans still in the pipeline. Principal is unloading its mortgage line of business in order to concentrate on providing life and health insurance, mutual funds, and other retirement services, according to J. Barry Griswell, chairman and CEO of the Des Moines, Iowa-based company.
Source: Wall Street Journal (05/13/04)
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