A mega-merger of Citicorp and Travelers Group Inc., that could offer consumers one-stop shopping for everything from credit cards and checking to insurance and investing, won approval Wednesday from the Federal Reserve Board.
The merger of the two New York-based companies, first announced in April, was approved by a 5-1 vote at a closed meeting of the Fed.
"The cross-marketing and customer-data-sharing arrangements proposed in this case are not likely ... to result in any significantly adverse effects," Fed officials said in a statement.The Justice Department also gave its blessing for the deal.
"We conducted a thorough investigation. We have closed that investigation, and we have allowed the transaction to go through," said Justice spokeswoman Gina Talamona.
Citicorp (CCI) is the parent company of Citibank, the world's largest issuer of credit cards with some 60 million in circulation.
Travelers (TRV) is an insurance, brokerage and investment banking giant with operating companies bearing household names such as Solomon Smith Barney, Primerica Financial Services and Travelers Life & Annuity.
The merged company would be called Citigroup Inc., and would continue to use Travelers trademark red umbrella as part of its logo.
With more than 100 million customers worldwide and assets of more than $751 billion, Citigroup would be the largest financial services firm in the United States, able to cross-market an unusually broad range of financial services to consumers. Someone negotiating a mortgage at Citibank could be told of Travelers' homeowners insurance, for instance.
Travelers and Citicorp officials have said they believe consumers want that kind of one-stop shopping, which would, for example, allow people to move their money by phone or personal computer not only between checking and savings accounts, but also insurance and mutual funds products.