Schroder Salomon Smith Barney

Published 03 Jan 2003
Reference 5096
Region Europe
Summary

This case focuses on Citigroup’s attempt to bolster its European presence by acquiring the investment banking business of Schroders PLC in 2000, following a conclusion on the part of key Schroders shareholders that the future of an independent Europe-based investment bank was limited. Also, that it was unlikely that shareholders would be able to achieve a better outcome that the Citigroup offer on a risk-adjusted present value basis if the firm remained independent.

Teaching objectives

A number of questions are addressed in the case: What was Schroders unable to survive as an independent, Europe-based investment banking firm? Or was it? Why did the previous shareholders choose to sell only the investment banking business to Citigroup, retaining the asset management business? How does the Schroders acquisition fit into Citigroup?s overall strategy? How would you measure ?success? or ?failure? in this regard? What about the price? What are the key integration challenges that face Citigroup, to make sure it gets the most out of the Schroders acquisition?

Keywords
  • AR2003
  • AR0203
  • RD0303
  • INVESTMENT BANKING
  • BANK STRATEGY
  • EUROPEAN FINANCIAL MARKETS
  • BANKING COMPETITION