Citigroup ( C) agreed to acquire ABN Amro's ( ABN) mortgage group.
Terms weren't disclosed, but Citigroup said it will purchase $9 billion in net assets and a $224 billion mortgage servicing portfolio. "The acquisition of ABN Amro Mortgage Group demonstrates our commitment to grow our consumer lending business in the U.S.," Citi said. "As a best-in-class provider and servicer of residential mortgages, we will be able to provide ABN Amro Mortgage Group's customers with an expanded suite of products while increasing our distribution channels in new and existing markets." The acquisition will add approximately 1.5 million servicing customers to CitiMortgage's portfolio as well as 2,500 wholesale brokers to its wholesale lending business. When combined with CitiMortgage's strong market presence, the combined company will move up a spot to No. 4 in mortgage loan servicing and strengthen CitiMortgage's No. 3 market position in originations, based on third-quarter 2006 numbers. The transaction is expected to close in the first quarter of 2007 and is subject to customary regulatory filings and approvals.