In praise of the Smith Barney deal
The headlines regarding the Citi-Morgan Stanley deal for Smith Barney have centered understandably on the looming "break-up" of Citi and the longevity of Vikram Pandit as CEO. Lost in the ink: The deal seems to be a winner for Citi. Breakingviews calls it a "deft start" to a larger break up.
The deal will create $6.5 billion in common equity and allow Citi to register a pre-tax gain of about $9.5 billion. The bank also gets 49 percent in the joint venture, which just might fare well. So are we to conclude that Pandit is the man for the break-up job after all? Stay tuned.
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