Monday, December 01, 2008

Wherein my taxes fund Citigroup's new acquisition First was the knowledge that Citigroup was in a bad way thanks to bad loans and credit cards. Then Citigroup tried to buy rival Wachovia, but was beaten out by Wells Fargo. Then came a new bailout of Citigroup by the US government, in a somewhat murky deal that covered bad assets and gave operating capital. The bailout for Citi, which protects the company from $306 billion of high-risk assets and puts $20 billion of new capital in Citi’s hands, is the biggest bank bailout ever. (And the anger that resulted when it was realized that the company was still going to spend $400 million dollars to get naming rights for the New York Mets baseball club stadium.) Now the next shoe drops. A fund owned by Citigroup has reached an agreement to buy a company called Itinere Infraestrcuturas Sa from Spanish constitution company Sacyr Vallehermosa Sa in a $10 billion deal. Sacyr is the #5 construction company in Spain, also owning oil resources and hospitals. The Itinere Infraestrcuturas Sa division owns toll roads in Spain, Portugal, and South America. Citigroup plans to sell off over a billion in highway assets to Spain’s Abertis Infraestructuras SA and Italy’s Atlantia SpA. Observers see the buy as a bargain, thanks to Sacyr’s need for cash to cover $5 billion in debt. Citi was seen as interested in expanding the ownership of toll roads across the world, a strategy that may fit in with a US move to increase spending on infrastructure. So let’s get this straight. Not only are US taxpayers paying for the Citi’s name on the Mets’ stadium buy, but we are also helping it make bets on the market as it acquires new companies, rather than trying to get its own house in order.What is going on here? 8:34:07 PM

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