Citi, Morgan Stanley Merge Brokerage Operations
Mega-bank Citigroup and Morgan Stanley will combine their brokerage ops into one mega-brokerage with $1.7 trillion in client assets, 1,000 offices around the world and more than 20,000 financial advisers, the companies announced moments ago.
The news has been rumored for days and we're going to give some love here to CNBC's Charlie Gasparino, who was all over this from the start.
Citi's brokerage group is Smith Barney, which Citi acquired in 1998.
The new combined brokerage firm under Citi will be called "Morgan Stanley Smith Barney."
Citi has been under stock pressure in recent months and got $45 billion in government loans to help absorb the cost of bad loans. Chief executive Vikram Pandit has been under fire, and former chairman Robert Rubin (total Citi compensation: $110 million), who helped move Citi into riskier areas, will not stand for reelection to the board at the next shareholders' annual meeting in April.
Morgan Stanley will retain 51 percent of the joint venture, giving Citi 49 percent.
January 13, 2009; 5:13 PM ET
Categories: The Ticker | Tags: Citi, Morgan Stanley, Robert Rubin, Vikarm Pandit
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