Mergers and acquisitions are a key element and by-product of credit markets and economics. Companies have a variety of motives for conducting mergers and acquisitions – some good, some questionable. Growth, competition and survival have long been the three major incentives for companies to merge. In 2007, a consortium led by Royal Bank of Scotland (RBS) acquired the Dutch bank ABN AMRO for $101 billion. In October 2008, as credit markets tightened, RBS received $35 billion in bailout money from the British government. In February 2009, the former Chairman of RBS had this to say: "We are sorry we bought ABN Amro. The deal was a bad mistake." The British government now owns 70% of RBS. In this section, CreditPulse provides coverage, analysis and perspective of mergers and acquisitions. Citigroup Finally Unravels...But Not Before Taxpayers Take $45 Billion Hit
February 18, 2009
The nation's largest commercial banks have been at the epicenter of the credit crisis. Last month, the most troubled of these banks, New York-based Citigroup, announced it was splitting apart into two segments basically undoing the mammoth merger of a decade ago. John Reed, former Citicorp CEO, admits merger was "a mistake."
On April 6, 1998, New York-based Citicorp and Travelers Group announced they were merging in an $82.9 billion deal which at the time was the largest in U.S. history. The new financial behemoth which brazenly combined banking with brokerage and investment services and insurance with assets of $700 billion was called Citigroup. CreditPulse provides insight into the failure of this mammoth merger.
CSI No. 37 Genesis Microchip, Inc. acquired by CSI No. 371 STMicroelectronics NV in a semiconductor industry transaction earlier this year.
