Citigroup CEO Vikram Pandit has lost the battle for Wachovia’s banking assets and will not come in the way of Wells Fargo acquiring all of Wachovia.

It’s of course possible that the U.S. government may have pressured Citi and the Desi butcher Vikram Pandit to shut up or promised Citi some other candy later in exchange for letting Wells Fargo acquire Wachovia.

Vikram Pandit

Meanwhile, Citi threatened that it would continue to seek compensatory and punitive damages for bad faith breach of contract and tortious interference.

Citi is seeking $60 billion in compensatory and punitive damages and filed a suit against Wachovia Corporation, Wells Fargo and the directors of both companies on October 6.