Viacom ultimately took the prize with a $107- per-share, $9.9 billion bid in February 1994. And Diller's summation--"They won. We lost. Next." -- signaled it was time to move on.
Repeat Performance
Rivaling the action in the New Economy were the deals being consummated in financial services throughout the 1990s. In banking, Chase merged with Chemical. Investment bank Morgan Stanley got together with brokerage Dean Witter, and Deutschebank bought Bankers Trust.
For much of the decade, Sanford Weill used Travelers Insurance Co. as a vehicle to expand from underwriting life insurance policies to underwriting stocks and bonds. He bought big targets like Smith Barney and Salomon Brothers. Having digested them, he turned to the biggest target possible: Citicorp.
In February 1998, Weill sounded out Citicorp CEO John Reed about a merger. And the massive, $83 billion deal, announced on April 6, 1998, did more than help the Dow to its first 9,000 close. It united Citicorp, Travelers, Smith Barney, and Salomon under one big umbrella. That effort to form a financial supermarket-- an endeavor at which both Sears and American Express had failed in earlier decades--was a leap of faith. Depression-era regulations forbade the marriage of insurance companies and banking firms, and Congress had just shelved legislation that would have rolled those regulations back.
But the merged company, with its 100 million customers in 100 countries, created a fact on the ground that was difficult for Congress to ignore. And as financial services firms continued to branch out, Congress would ultimately approve changes to the 1933 Glass- Steagall Act. (The new legislation will doubtless set the stage for a round of new deals.) As a final triumph--and yet another example of how government officials were following their lead--Reed and Weill convinced former Treasury Secretary Robert Rubin to join Citigroup in late 1999.
The century in deals ended much as it had begun: with a blockbuster deal engineered by respected and powerful Wall Street bankers. The more deals change, the more they remain the same.
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