Word: salomone
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Weill's coup not only creates a global financial supermarket, but it will also impel a consolidation in which Wall Street investment companies will either get big or get run over. The merger unites Salomon, a power in bonds and a player in investment banking, with the Travelers-owned Smith Barney brokerage, which is stronger in stocks. The Travelers umbrella also includes companies that sell life insurance, property and casualty insurance, annuities, mutual funds and credit cards. Travelers Group's stock market value of $55 billion will now dwarf such giants as Merrill Lynch ($24 billion) and the newly formed...
...decade, became part of the blue-chip 30-stock Dow Jones industrial average. Yet he figured he still lacked global reach. "The real growth opportunities in the financial business are going to come from the privatization of government-owned companies around the world and in emerging markets," Weill says. "Salomon gives us the platform to participate in that...
That platform didn't come as cheap as most of Weill's deals, but he still figures it to be a good transaction. Salomon, with clients from Boston to Bangkok and offices in 23 countries, has earned a solid reputation for its prowess in international finance. The 87-year-old firm also has a reputation as Wall Street's version of a frat-jock house. Its swaggering, foul-mouthed and lavishly rewarded traders epitomized the masters-of-the-universe Wall Street culture of the 1980s. That swagger was staggered by a government bond-trading scandal in 1991 from which...
Weill, who began his career as a Wall Street runner and is universally known as "Sandy," now faces the task of melding the freewheeling Salomon culture into the more cautious Travelers empire. Layoffs seem inevitable. Analysts estimate that as many as 2,000 overlapping jobs--mostly in "backshop" trade-clearing slots--could vanish from a total of 34,000 positions at Salomon and Smith Barney...
Weill naturally downplays any talk of culture wars or conflicts among his managers. And he says the risks inherent in Salomon's volatile trading operations (Salomon's traders reportedly blew $100 million recently betting the wrong way on the MCI-British Telecom merger) will look like "a little bit of a pimple" alongside the $30 billion in revenues that Travelers will have after the merger. That pimple could look even smaller if, as expected, Weill makes more acquisitions. Next up could be a commercial bank, which would add lending power to the Travelers portfolio. "I have never in my life...