Citigroup to Acquire KorAm Bank for KRW 3.18 Trillion ($2.73 Billion)*

Seoul, Korea – Citigroup (NYSE: C) and KorAm Bank (KSE: 016830.KS) today announced that they, together with an investor consortium led by The Carlyle Group and JP Morgan Corsair II, have signed an agreement for the acquisition of KorAm by Citigroup. The terms of the transaction include the acquisition of the consortium’s 36.6% stake in KorAm’s common stock and a tender offer for up to 100% of the remaining shares at a price of KRW 15,500 per share in cash, or a total of KRW 3.18 trillion ($2.73 billion). The price per share represents a 6.7% premium over the average closing price of Koram stock on the Korean Stock Exchange for the last 30 trading days of KRW 14,530 and a 17.2% premium over the average closing price for the past six months of KRW 13,228. The Board of Directors of Citigroup and KorAm have approved the transaction and the Board of KorAm intends to recommend that shareholders tender their shares to Citigroup. The tender offer will commence as soon as all required regulatory approvals are received, and the transaction is expected to close in the second quarter of 2004.

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
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*U.S. dollar amounts based on KRW 1,167 = U.S. $1.00, the exchange rate as of February 20, 2004.

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.”

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