It is rather ironic that Sandy Weill stepped down last month as CEO of Citigroup and, at that very time, negotiations were going on for the merger of Sandy's 'baby', Travelers Property Casulalty, with St Paul.
Weill's Travelers Group and Citicorp merged to become Citigroup in 1998. When Weill called up Citicorp CEO John Reed, he first thought that Weill was trying to flog him a ticket to an expensive charity event. Reed was apparently prepared to go to $25,000 for a table. In the event, the two companies announced a merger deal just five weeks after that first call. The merger was eventually to cost Reed his job as Weill soon took sole control.
Although Travelers was actually sold and spun off from Citigroup in March 2002, the deal with St Paul means that the company has now lost its independence. Weill's baby, very much like Citigroup, has now got a new parent. And new Citigroup CEO Charles Prince is wasting no time on stamping his own mark on the company.
Speaking earlier this week, Prince effectively ruled out further big mergers, although confirmed that 'small' or 'fill in' acquisitions were on the cards. Prince said that that a big transformational merger was highly unlikely. Reuters quotes him as saying that 'it would be hard to transform Citigroup. We would have to merge with Canada!'. The strategy going fowarded is to focus on growing the company's existing businesses and expanding operations in places like India and China where there is thought to be great potential.