The Citicorp and Travelers Group deal--the largest corporate merger ever--is everybody's lead. Associated business and policy and personality stories take up much of the rest of the day's news hole.
The resulting insurance, banking and securities company will be called Citigroup (narrowly edging out Travelerscorp, Groupcorp, Corpgroup, Corptravelers, and Groupciti, we hear) and will become the fifth largest American corporation. The newspapers' accounts of the size of the deal vary somewhat: the New York Times says it's $70 billion, the Washington Post says $82 billion. USA Today, the Los Angeles Times and Wall Street Journal say it's $83 billion. The NYT figure apparently doesn't take into account the increase in the companies' shares during the Wall St. explosion--the Dow closed over 9000 for the first time ever--the deal touched off.
The papers report that the new financial services company will offer "one-stop shopping" for consumers and corporations. The NYT and WP are somewhat breathless about the possibility, but the LAT says it's not at all clear that consumers want this, noting that previous efforts to offer it have "generally failed." The WSJ elaborates, pointing out that previous high-profile attempts by American Express and Sears to cross-pollinate with Wall St. partners failed. In addition, notes the Journal, creating a huge full-service financial edifice flies in the face of the trend toward discount brokerage firms and cheap on-line trading.
The dailies emphasize that the most striking part of the deal is that current laws, in force since the Depression, prevent financial cross-selling on this scale. The deal boldly challenges all this, says the WP, putting pressure on Congress and regulators to change the status quo, in the next five years before the deal goes into full effect. The NYT calls this feature remarkable "brashness," and the LAT says it is its "most remarkable aspect." Another pressure factor is that it's widely believed this merger will inspire other similar ones.
Another unusual aspect of the deal drawing lots of comment is that Travelers' Sanford Weill and Citicorp's John Reed have decided to rule their new kingdom as co-CEOs. A piece on the USAT "Money" front page says experts are dubious about the arrangement. The WSJ wonders if the two men can "merge their egos." And the NYT business section piece on the relationship runs under the header, "The Odd Couple."
Weill and Reed are quoted as saying the merger will not produce large-scale layoffs. But, notes the WSJ, layoffs of over 1,000 employees followed each of Weill's previous big deals.
As has become common in merger reporting, some of the papers attempt to cloak the event in intrigue and drama. The Journal and the NYT try to summon atmosphere with their descriptions of early meetings where the top dogs sniffed each other. And the WP says "the excitement was palpable" during Monday's news conference at the Waldorf announcing the merger, with the arrival of Weill and Reed reminding the paper of nothing so much as "the arrival of movie stars at the Academy Awards." But the excitement is not infectious: after all, what you have here basically is suits writing checks to themselves.
Indeed, the only real corrective to all the day's money euphoria comes in the WP front-page piece, "Boom Is Fine--If You Own Stock," which notes that six of every ten American households still do not own any shares of anything.
The LAT front reports that the California Supreme Court handed a defeat to unwed fathers with its ruling Monday that a man who fathers a child with a women who is married to someone else may be denied all legal parental rights. As the paper points out, this is significant in a state where a third of the children are born to couples who are not married to each other.
If you missed the two top stories in yesterday's USAT--the government's first post-deregulation attempt to preserve competitiveness among airlines and the emergence of a drug that can prevent breast cancer--they are on the NYT's front today.
The WP runs a piece inside reporting that during a church service last Sunday, Cardinal John O'Connor of New York criticized President Clinton from the pulpit for taking Catholic communion while in South Africa. The South African priest who invited Clinton to do so is quoted in the paper as saying that once Clinton stood up, he was thinking about "how much embarrassment it would have caused him by my saying, please sit down."
Novelist Lucian Truscott IV, a former Army officer and son and grandson of generals, writes a NYT op-ed in support of the Clinton administration's latest assault weapons ban. Truscott compares the intensive training you get in the Army with one of these weapons long before you're ever allowed to fire it, and then only under the supervision of an expert marksman, with the situation in states like Arkansas, where "it's legal for a 10-year-old to own a semiautomatic assault weapon without a moment of safety instruction, training in how to shoot it or adult supervision."