I now pronounce you…..what?

A few weeks ago Citigroup, with a little help from the Fed, had agreed to support and marry Wachovia. Yesterday, the Federal Reserve Board approved the sale of Wachovia to Wells Fargo in a transaction that would not require the government’s involvement and would create the largest bank branch network in the US. Banking giant Citigroup said Thursday it had ended talks with Wells Fargo about reaching an agreement to acquire parts of the struggling bank Wachovia and is no longer looking to buy any of Wachovia’s assets.

If you thought your new savings passbook would read Citi, it will probably look like a Wells Fargo one by year-end. Shareholders of Wachovia still must approve the sale.

Another bank bites the dust. Citigroup agreed to a takeover of the troubled Wachovia in yet another government engineered rescue.

With huge losses in its mortgage portfolio, the nation’s sixth largest bank is now the latest to fail – sort of. “Wachovia did not fail; rather, it is to be acquired by Citigroup Inc. on an open bank basis with assistance from the FDIC,” the Federal Deposit Insurance Corp. (FDIC), the banking industry regulator, said.

Citigroup will buy the majority of Wachovia’s operations, including the bulk of its assets and liabilities. Citi will only assume up to $42B of losses from a pool of $312B of loans held by Wachovia; the FDIC will absorb losses beyond that and take a stake in Citigroup for the guarantee.

The takeover will create a retail bank with almost 10% share of the US market deposit sector in the continuing consolidation of US banks. Its business as usual if you have an account with the bank and no word on keeping the Wachovia name and brand.