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    Citicorp and Travelers Group Merger: Reasons To Merge

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    Iko Maisuradze
    Citicorp and Travelers Group merged in 1998 for several strategic reasons: 1) To take advantage of cross-selling opportunities between their products and distribution channels. 2) To explore new markets by gaining access to each other's territories and customer bases. 3) To diversify their revenue streams and become less dependent on volatile earnings. 4) Potential cost savings from economies of scale by spreading consumer relations across more products. The merger was announced in April 1998 and completed in October 1998, making Citigroup the largest financial company in the world at the time by combining commercial banking, investment banking, insurance, and brokerage services.

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    Citicorp and Travelers Group Merger: Reasons To Merge

    Uploaded by

    Iko Maisuradze
    18 views1 page
    Citicorp and Travelers Group merged in 1998 for several strategic reasons: 1) To take advantage of cross-selling opportunities between their products and distribution channels. 2) To explore new markets by gaining access to each other's territories and customer bases. 3) To diversify their revenue streams and become less dependent on volatile earnings. 4) Potential cost savings from economies of scale by spreading consumer relations across more products. The merger was announced in April 1998 and completed in October 1998, making Citigroup the largest financial company in the world at the time by combining commercial banking, investment banking, insurance, and brokerage services.

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    this about succesful merger of two companies

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    Successful Merger

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    Citicorp and Travelers Group merged in 1998 for several strategic reasons: 1) To take advantage of cross-selling opportunities between their products and distribution channels. 2) To explore new markets by gaining access to each other's territories and customer bases. 3) To diversify their revenue streams and become less dependent on volatile earnings. 4) Potential cost savings from economies of scale by spreading consumer relations across more products. The merger was announced in April 1998 and completed in October 1998, making Citigroup the largest financial company in the world at the time by combining commercial banking, investment banking, insurance, and brokerage services.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    18 views1 page

    Citicorp and Travelers Group Merger: Reasons To Merge

    Uploaded by

    Iko Maisuradze
    Citicorp and Travelers Group merged in 1998 for several strategic reasons: 1) To take advantage of cross-selling opportunities between their products and distribution channels. 2) To explore new markets by gaining access to each other's territories and customer bases. 3) To diversify their revenue streams and become less dependent on volatile earnings. 4) Potential cost savings from economies of scale by spreading consumer relations across more products. The merger was announced in April 1998 and completed in October 1998, making Citigroup the largest financial company in the world at the time by combining commercial banking, investment banking, insurance, and brokerage services.

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    © All Rights Reserved
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    Citicorp and Travelers Group merger

    Reasons to merge
    All companies have some reasons to merge in our case we have several reasons
    first one is cross selling, companies took maximum advantage of strengths in
    products and distribution channels. Secons one is exploring new markets, the
    merger gave them opportunity to explore other companies teritories for example
    travelers group got instant access to Citicorp offices outside of U.S.A. third reason
    was diversification, the combination of these two companies made them less
    dependable on volatile earning streams. Fourth and last one is economy of scales,
    they had potential cost advantages, since they could spread consumer relations
    over more products.

    Process of merge
    The merger was announced in April of 1998 and was finished in October of same
    year. Like other merging companies they had two CEO's John Reed and Sandy Weill
    and each of them held half of the company. This merger made Citigroup largest
    financial company in the world and gave them opportunity to combine commercial
    banking, investment banking, insurance underwriting and brokerage in one
    company for the first time in history.

    Difficulties and reason of success


    Main difficulty in merger of these two companies was that they were operating in
    different fields, but this fact was main reason of their success. As both companies
    shared same culture they didn't face culture issues, however mixing so many fields
    resulted in some problems which were solved by dividing company into five
    different businesses: Citi Markets, Citi Transaction services (CTS), Citi Private Bank,
    Citi Capital Advisor and Citi Corporate & Investment Banking. Merging of these
    companies gave some immediate effect, most important of them was rising
    companies value by 30 billion dollars, also Cross Selling gave opportunity to
    Citigroup to generate 600 million dollars of profit over 2 years, however Citigroup
    face difficulties in long term run. They had problems adapting to changing market
    requirements and upgrading their technology (for such a big company it meant
    spending a lot of money). Also they had a huge crisis and after that they had
    problem stabilizing.

    Current result
    Currently Citigroup is one of the biggest finance companies in the world, holding
    13th place as biggest company in the world.

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