Subject category:
Strategy and General Management
Published by:
IBS Case Development Center
Length: 10 pages
Data source: Published sources
Topics:
USA retail banking industry; Mergers & acquisitions; Financial conglomerates; Financial supermarkets; Integrated selling; Cross-selling; Transformational mergers; Glass Steagall Act; Sandy Weill; Gramm-Leach-Bliley; Conflict of interests; Economies of scale; Economies of scope; Riegle-Neal Act; CitiGroup
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https://casecent.re/p/20022
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Abstract
CitiGroup pioneered big mergers and acquisitions in the US banking industry, and led the first round of big consolidations resulting in the formation of financial conglomerates. Transformational mergers occurred in the industry marking the beginning of an integrated approach for market expansion. After a halt in the mergers, the trend resurfaced with the big merger of Bank of America and Fleet Boston. However, this time CitiGroup stayed away from big mergers. Charles Prince, who took over as the new CEO, focused on growth strategy through acquisitions of small regional banks. On the other hand, its major rivals like JP Morgan and Bank of America merged with big banks and were capitalising on big mergers. The case details the consolidations that occurred in the US banking industry and the motives that drove big banks to merge. CitiGroup''s contrarian approach, of pursuing slower growth through small- scale acquisitions is also detailed. The case helps discuss the growth strategies of US banking firms and the possible threat to CitiGroup''s position in the light of big mergers in the country.
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Abstract
CitiGroup pioneered big mergers and acquisitions in the US banking industry, and led the first round of big consolidations resulting in the formation of financial conglomerates. Transformational mergers occurred in the industry marking the beginning of an integrated approach for market expansion. After a halt in the mergers, the trend resurfaced with the big merger of Bank of America and Fleet Boston. However, this time CitiGroup stayed away from big mergers. Charles Prince, who took over as the new CEO, focused on growth strategy through acquisitions of small regional banks. On the other hand, its major rivals like JP Morgan and Bank of America merged with big banks and were capitalising on big mergers. The case details the consolidations that occurred in the US banking industry and the motives that drove big banks to merge. CitiGroup''s contrarian approach, of pursuing slower growth through small- scale acquisitions is also detailed. The case helps discuss the growth strategies of US banking firms and the possible threat to CitiGroup''s position in the light of big mergers in the country.