Jamie Dimon, JPMorgan Chase's (NYSE: JPM) CEO, would be a great replacement for Citigroup Inc.'s (NYSE: C) recently retired CEO Chuck Prince. The only problem is that Dimon already has a job.
But Dimon -- who was Citi ex-CEO Sandy Weill's right hand man until Weill fired him for not giving his daughter a good enough job -- would probably enjoy running a combined Citi-JPMorgan Chase. After all, after he left Citi, he took over Bank One which merged with JPMorgan Chase. And then Dimon took over from its former CEO, Bill Harrison. But a Citi-JPMorgan Chase combination could land Dimon in Sandy Weill's old slot once such a deal closed.
Such a merger would probably be couched as a merger of equals. JPMorgan Chase's market capitalization of $140 billion is currently less than Citi's ($160 billion). But at the rate Citi is falling, that valuation gap probably won't last long. Then there's the little matter of the deposit cap -- no bank can control more than 10% of U.S. deposits. With combined deposits of $1.5 trillion -- which includes Citi's international deposits -- the combined banks would probably control more than 10% of the U.S.'s $7.5 trillion (as of January 2007) in deposits.
So the merged companies would need to divest some branches if they wanted the deal to go through and Dimon would not be able to take over officially until after the merger closed. But these seem like small prices to pay to get a good CEO for Citi.
Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He owns Citigroup shares and has no financial interest in JPMorgan Chase.
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Reader Comments (Page 1 of 1)
11-19-2007 @ 5:40PM
R F PHELAN said...
AS A JP MORGAN SHAREHOLDER, I WOULD NOT LIKE TO SEE A MERGER WITH CITIGROUP. CITI HAS WAY TOO MANY PROBLEMS IN AREAS WHERE DINON ALREADY SOLVED SIMILAR ITEMS AT JP MORGAN. CITY SHOULD BE BROKEN UP INTO ITS VARIOUS PARTS, AND PERHAPS JP MORGAN COULD BUY SOME OF THE INTERNATIONAL PARTS, WHERE CITI IS STRONGER THAN ALMOST ALL INTERNATIONAL BANKS, AND JP MORGAN IS MUCH WEAKER.
11-19-2007 @ 9:24PM
al said...
A brilliant thought from the Citi side on how to save a rudderless ship. From the JPM point of viewthere are also valuable benefits. In markets such as the NY metro area, there is sooooo much overlap that the merger would do wonders to the bottom line in less than 4 quarters. It would also provide JPM with new consumer markets as well as the scale to now go head to head with BOA and other top tier domestic banks.
With Dimon at the helm, in 18 months or less, the fat would be all cut away, the irrational management structure would be obliterated, and the engine would start humming again at full speed.
Get rid of the pieces that are difficult to manage, combine similar operations, let the best of breed practises survive, and watch the share price zoom.
Yes, Dimon is the force that can make this happen in our lifetime !!!
11-20-2007 @ 1:26PM
JJC said...
why doesn't citi make a statement that they are not going to cut the dividend...that is adding to the stock turmoil. i can't think of 10 cos. in the US more stupidly managed, or more bureaucratically indolent, than citi. ross perot was prescient about them...only 10 yrs too soon
11-20-2007 @ 4:16PM
Jill Schottenstein said...
NO ANY MERGERS AT THIS TIME JUST CONFUSE THE ACCOUNTING PROCESS.
PERHAPS JP SHOULD LEARN HOW TO AUDIT AND COUNT FIRST.... WHAT WILL YOU TEACH YOUR INTERNS ABOUT COMPLIANCE AND CONFLICTS OF INTEREST? CAN YOU BE A TRANSFER AGENT, LOAN OFFICER, MORGAGE HOLDER, TRUSTEE, AND BOARD MEMBER ALL AT THE SAME TIME?
JP WAS A TRANSFER AGENT FOR M/I SCHOTTENSTEIN HOMES IN 1986 REQUEST A PROSPECTUS AND SEE FOR YOURSELF.
THEY ARE ALSO THE BOOKRUNNER FOR M/I HOMES IN 2005 MERGER OF SHAMROCK HOMES.
A CONFIRMATION WAS RECEIVED, NOVEMBER 9 2007 (IRS), THERE IS NO RECORD OF TAX'S FOR CERTAIN TRUSTS OF THE TRUSTEE'S ROBERT, IRVING, STEVEN , JP MORGAN,AND DELOITTE FOR RESTRICTED STOCK (NFB) HELD BY THE ISSUER OF M/I HOMES. FUNDS WERE REMOVED FROM THE BENEFICIARY'S TRUST, TAX RETURNS WERE STAMPED FROM DELOITTE AND M/I HOMES BUT NEVER RECEIVED BY THE IRS.
DELOITTE HAS BEEN THE AUDITOR FOR M/I HOMES SINCE 1982, WHERE ARE THE TAX RECORDS AND HAS ANYONE DONE A REAL AUDIT NOW INVOLVING OVER 19 BANKS AND INTERNATIONAL HOLDERS?
THE OPERATION AGREEMENT IS MISSING FROM THE SEC NO ACTION LETTER (2-28-03) SIGNED BY M/I HOMES AND COUNSEL ACCEPTING THIS DOCUMENT, WHY DOESN'T THE GOV. HOLD THE BOARD OF DIRECTORS, THE AUDITOR & INSTITUTIONAL HOLDERS ACCOUNTABLE?
WHEN WILL THE GAO GET INVOLVED?
REQUEST AN AUDIT FROM THE GAO....
11-20-2007 @ 6:43PM
darswan said...
As a shareholder in both companies I would like to see a merger because I believe Jamie Dimon is the best Mega Bank CEO around. This is the kind of opportunity that presents itself once in a generation.
11-29-2007 @ 1:01PM
John Pether said...
Jamie Dimon is the only person that should be considered for the mammoth job of cleaning up the Citi Group mess.He is one of the few people out there that deserves the high pay that CEO's are currently commanding.I worked under Jamie for a few years while at Smith Barney.He is exceedingly personable ,smart and a magician with numbers.He also listens to people and makes himself available.Vote for Jamie!!