How mergers go wrong

How mergers go wrong.


The article “Merger Brief: First among equals” describes one of the biggest mergers in the American corporate history. In 1998 Citicorp, the world’s most profitable company, merged with Travelers. Despite that differences in size of each company’s success in operations and the fact that Citicorp was dominant in that merger, both executives, John Reed of Citicorp and Sandy Weill of Travelers, claimed that it was “merger of equals”, becoming co-chairman and co-chief executive. For their merger strategy, they have adopted “Noah’s Ark” approach to a top management, when every top-level position was made of two employees coming from both Citi and Travelers. Nevertheless, there has been some resistance from employees of involved companies; for example, some of Citicorp’s staff wanted their services to continue under Citi’s brand rather than switching to anything new. Furthermore, two ambitious executives, having their own points of view a...