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Travelers being spun off

Thursday, Dec. 20, 2001 | 9:51 a.m.

NEW YORK -- Nearly four years after creating the world's largest financial services company by bringing together huge insurance, banking and brokerage businesses, Sanford I. Weill, the chief executive of Citigroup, said on Wednesday that he was jettisoning most of Travelers Insurance.

Weill plans to sell 20 percent of the commercial, auto and home insurance business, known as the Travelers Property Casualty Corp., through a stock offering early next year that analysts expect to raise $4 billion to $6 billion. He intends to give the rest of the Travelers stock to Citigroup shareholders.

Citigroup would keep the bright red umbrella logo, so prized by Weill and other Citigroup executives that they frequently wear umbrella lapel pins and ties. The parent company would also keep the much smaller life insurance and annuities businesses that Weill said had more in common with banking and brokerage operations.

Weill has been frustrated that Citigroup shares sell at a lower multiple of their earnings than other financial services companies. He said splitting off a relatively sluggish business like Travelers should help. "Travelers Property Casualty didn't meet our hurdle rates," Weill said.

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