Sandy Weill and the Making of Citigroup
By Amey Stone and Mike Brewster
Wiley -- 306pp -- $24.95
When Travelers Group Inc. merged with Citicorp in 1998, the result was a sea change in the financial world--or as BusinessWeek dubbed it at the time, "Weill Street." The architect of the merger, Sanford I. Weill, is the subject of King of Capital by Amey Stone, a staff editor at BusinessWeek Online, and journalist Mike Brewster. This is a rags-to-riches-to-greater-riches story, recounting Weill's rise from a middle-class Brooklyn boyhood to primacy on Wall Street.
The book focuses on Weill as a dealmaker, and there is plenty of grist for that. Weill got his start in 1960, as a partner in the small brokerage firm of Carter, Berlind, Potoma & Weill. The firm grew steadily and in 1970 acquired the troubled retail brokerage Hayden, Stone & Co. The acquisition was the prototype for the many deals that would follow. Four years later, the merged firm bought another financially strapped outfit, Shearson Hamill. The result was Shearson Loeb Rhoades Inc., Wall Street's second-largest brokerage--followed by Weill's biggest mistake, the sale of Shearson to American Express Co.
The 1981 Shearson-American Express merger seemed on the surface to be a good idea. "The truth is that Weill would have been crazy not to jump at the deal," say the authors. But it proved to be a hard marriage. There were strains from the very start, and Weill had a tough time playing second fiddle to American Express Chief Executive James D. Robinson III. Weill left the company in 1985 and bought a struggling little Baltimore firm called Commercial Credit Co. Then he staged an impressive comeback, buying Primerica in 1988, taking back Shearson from American Express in 1993, and making his grand move, the Travelers buyout.
With the subsequent purchase of Salomon Brothers, Weill was back where he was before he signed his ill-fated American Express deal--and then some. As a result of the Citigroup merger, the immigrants' kid from Brooklyn was at the top of the heap on Wall Street.