$70 billion deal merges Citicorp with Travelers

NEW YORK Citicorp and Travelers Group are merging in a record $70billion deal between the nation's second-biggest bank and a leadingprovider of financial services ranging from trading stocks toinsurance.

The deal easily surpasses the previous record price of $37billion that the telecommunications company WorldCom is paying forMCI, the nation's second-biggest long-distance provider.

The new company would be called Citigroup Inc., and it wouldhave more than 100 million customers in 100 countries.The new Citigroup would use the trademark Travelers red umbrellaas its logo. It would have assets of almost $700 billion, revenue ofnearly $50 billion and operating income of about $7.5 billion.Citicorp is the parent company of Citibank, an internationalbanking powerhouse, and also is the world's largest issuer of creditcards with some 60 million bank cards.Travelers Group is an insurance, brokerage and investmentbanking giant. Its operating companies include Salomon Smith Barney,Travelers Life & Annuity, Travelers Property Casualty Corp.,Primerica Financial Services and Commercial Credit.The merger announcement set Wall Street experts buzzing aboutwhat would constitute the next financial services mega-merger.Citicorp closed up $39 at $181.87 1/2, and Travelers closed up $11.321/4 at $73 a share.The merger will mean that their customers will have easieraccess to a much broader array of financial products. For example:Citicorp account holders can now transfer money by telephone orpersonal computer between checking, savings and money marketaccounts. After the merger, they will be able to make transfersbetween those accounts, plus Travelers' insurance and mutual fundproducts.Large financial companies have said for a long time that studieshave shown their customers want this type of one-stop shopping. Onthe other hand, it remains to be seen how the online revolution willfactor in to huge mergers such as this one.Price-sensitive consumers can now shop the Internet for the bestdeals on insurance and banking products, and they may not be willingto pay for the convenience of doing it all with the same company.Neither company commented on whether layoffs were planned.