Today's breakingviews praises the idea about which I posted last week: a merger between Citigroup Inc. (NYSE: C) and JPMorgan Chase (NYSE: JPM). (DealBook has also picked this up.) I thought such a merger would be a good way to get JPMorgan CEO, Jamie Dimon, into Citigroup's CEO slot.
Here was my rationale: "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."
Breakingviews said: "J.P. Morgan boss Jamie Dimon is the top pick of many investors to succeed Mr. Prince. Not only did Mr. Dimon spend more than a decade carrying Sandy Weill's bags on the shopping spree that built Citigroup, he also has made the financial-supermarket model work for his current investors. Citi shares are down 31% in the past four years; J.P. Morgan shares are up 24%."
I like the analysis breakingviews did of how much better JPMorgan stock has performed than Citigroup's.
And just as I did, breakingviews commented on the divestitures that would be required to conform to the 10% deposit ceiling.
I don't know whether breakingviews read my post last week, but I agree with its thinking. If Citigroup can't get Hank Paulson into the CEO slot, the merger with JPMorgan could be a good way to save 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)
11-29-2007 @ 12:35PM
steve said...
The world has waaaaaaaayyyy to many "experts" and "analysts". Why do we have to be subjected to their constant, and for the most part banal, attempts at attention?
11-29-2007 @ 12:36PM
John Mader said...
God help us! Jamie does not need Citigroup. A merger would only hurt JP Morgan Chase rather than helping Citi. Let us hope this does not happen.
11-29-2007 @ 12:49PM
BamBam said...
This might have made a lot of sense a year ago, particularly if considered as a prelude to a subsequent breakup into single line businesses.
But, now Citigroup shareholders would be at a serious disadvantage. Citi is actually the better collection of assets, but at today's firesale prices, shareholders would be too diluted in a merger.
The stubborness and stupidity of Chuck Prince has cost Citi shareholders dearly.
11-29-2007 @ 4:59PM
George said...
Not to take anything away from Jamie, but JPMC was on the upswing before he joined on. He'll have a much bigger challenge with a merged JPMC and Citi. Chase stockholders should be happy with this merger idea.
11-30-2007 @ 1:39AM
Jill Schottenstein said...
WHICH IS THE REAL M/I HOMES?
M I HOMES INC (NYSE:MHO)
After Hours: 9.70 0.02 (0.18%) on 11/29/07
Last Trade: 9.68
Trade Time: Nov 29
Change: 0.11 (1.12%)
Prev Close: 9.79
Open: 9.82
Day's Range: 9.51 - 10.00
52wk Range: 9.51 - 39.11
Volume: 279,300
M/I HOMES SR A PF DS (NYSE:MHO-PA)
Last Trade: 14.50
Trade Time: Nov 29
Change: 0.61 (4.39%)
Prev Close: 13.89
Open: 14.50
Day's Range: 14.00 - 14.50
52wk Range: N/A
Volume: 25,200
Avg Vol (3m): N/A
Market Cap: N/A
P/E (ttm): N/A
EPS (ttm): N/A
Div & Yield: N/A (N/A)
12-06-2007 @ 6:29PM
leon tully said...
no way should jpm merge with citi. let them stand alone
12-06-2007 @ 6:28PM
leonard tully said...
i will not like to see any merger of these 2 banks
12-10-2007 @ 2:32AM
Jill Schottenstein said...
CONNECTION WITH PAINEWEBBER, THE CLEVELAND CLINIC, CHEVRON, JP MORGAN, THE RETIREMENT FUND OF HAWII, FIDELITY, GODLMAN SACHS WHATS UP HERE????
insignia investment management group
Case Number: 3:2007cv04853
Filed: October 5, 2007
"STRATEGIC PARTNERS: FINANCIAL WRITING
KRISTINE M. DETWILER, CFA, CPA, Principal, Detwiler Associates, Inc."
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"Prior to founding Detwiler Associates, Ms. Detwiler was a Vice President of Client Service at Independence Investment Associates, a $30 billion asset management company in Boston. At Independence, she was the senior relationship manager for 25% of the firm's clients, including Chevron Corporation, The State of Hawaii Employees' Retirement System and The Cleveland Clinic Foundation. Ms. Detwiler retained these relationships by consulting with her clients on portfolio performance, investment strategy and financial market conditions. She also sold additional products to her customers, developed the corporate marketing brochure and wrote the quarterly investment report sent to the firm's entire client base."
"Earlier in her career, Ms. Detwiler was an institutional equity salesperson for Fidelity Investments and an institutional fixed income salesperson for Goldman Sachs."
"Ms. Detwiler graduated with highest distinction from the University of Virginia with a BS in Accounting and received her MBA from Dartmouth's Amos Tuck School of Business Administration."
"Her clients have included leading financial firms such as MetLife, JPMorgan Chase, Neuberger Berman, SwissKey Funds, PaineWebber Incorporated and its subsidiary, Mitchell Hutchins Asset Management, as well as many not-for-profit organizations. She serves as the senior writer for Towers Group, a financial public relations firm in New York, and she has also taught English and writing to international students at Baruch College, City University of New York. In 1997-98, she was a Soros Professional English Language Teaching Fellow at a vocational high school in Nova Gorica, Slovenia."
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