Newsmaker: Sanford Weill
If he were involved in a 12-step recovery program, one of the co-chairmen of the newly minted Citigroup would tell his fellow CEOs: "I'm Sandy Weill and I'm a buyaholic. Until today, I hadn't merged or snapped up a company in six months."
If a merger is in the news, it might well involve Sanford I. Weill, who used the Travelers Group insurance umbrella to patch together a highly diversified provider of financial services.
The latest confirmation of Weill's acquisition addiction came Monday, when Travelers and Citicorp, the nation's second-largest bank, announced they were merging in a record-shattering $70 billion deal after talks lasting just 4 and 1/2 weeks.
Citigroup, the new company, will retain the Travelers well-known red umbrella in its logo. John Reed, Citicorp's chair, will co-chair the new company with Weill.
Just last September 24, Weill's Travelers announced it was acquiring Salomon Inc., the major bond-trading firm, for $9 billion and joining it with another Travelers acquisition, Smith Barney Inc., the large brokerage firm.
Weill made his reputation by acquiring companies then slashing personnel and costs as he focused on consumer value. He's had his successes and failures, but is riding high now as the creator of a major financial services company in just over 10 years.
"He's been fantastic," John Welch, the chief executive of General Electric Co., has been quoted as saying about Weill's transformation of the Travelers. "He took air and turned it into this big, successful thing. It's been remarkable."
Weill, 65, grew up in a middle-class home in Brooklyn and began his career as a messenger at the investment firm Bear Stearns Cos. in 1955. Five years later, he borrowed $200,000 and with three friends formed a brokerage that, through acquisitions, became Shearson Loeb Rhoades. In 1981, he sold Shearson to American Express. Two years later he was president of American Express.
In 1985, Weill quit as it became clear he would not succeed James Robinson III as CEO. He also failed in an attempt to take over BankAmerica Corp.
But 1986 was the beginning of the big leap forward. He spun off Commercial Credit from Control Data, acquired Primerica and A.L. Williams insurance company two years later and in 1992 bought 27 percent of Travelers. From there, he took back Shearson from American Express, bought the remainder of Travelers, gobbled up Aetna Life & Casualty and agreed in the fourth quarter of last year to take Salomon.
Little over a year ago, Travelers got recognition as one of the country's bluest blue-chips. Its stock became one of the 30 components of the Dow Jones industrial average on March 17, 1997.
In February, Weill approached Reed about their companies merging. Monday, at a news conference, Reed said the business logic was compelling.
"When Sandy said to me it might be something we should do, I knew it was worth looking nto," Reed said.
Written By Peter Alan Harper
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