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.
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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.
