Citigroup, the world's largest financial holding company, has announced a $3.4 billion deal with
According to the agreement, Legg Mason will pay $1.5 billion of its common and non-voting convertible proffered shares in exchange for Citigroup's global asset management business, a total of $437 billion in assets, and a five-year loan of $550 million from Citigroup's corporate and investment bank. In return, Citigroup will get Legg Mason's private brokerage and capital markets business.
In transferring the brokerage operations of Legg Mason, Citigroup tacks on more than 1,300 brokers to raise its total to 13,800, which will allow it to nip at the heels of rival
Moreover, the deal will put an end to Citigroup's presence in mutual fund industry, which was marred by the $208 million in fines it paid to the
Separately, Legg Mason will also acquire the
"Legg Mason becomes a singularly focused, more profitable and certainly more influential organization within the global asset management community," said the company's CEO Raymond Mason, in a press release.