In late September, with the markets cratering, and talking heating up that moth Goldman Sacns and Morgan Stanley needed to partner up with a large bank, Goldman Sacns CEO Lloyd Blankfein made a call to Citi’s Vikram Pandit about a deal:
FT: Lloyd Blankfein, Goldman Sachs’ chief executive, called Vikram Pandit, his Citigroup counterpart, last month to discuss a merger, in a dramatic example of the secret manoeuvring that preceded the government bail-out of the financial sector.
The call, which was made at the tentative suggestion of the regulatory authorities or at least with their blessing, was made shortly after Goldman had won surprise approval to convert itself from a securities firm into a commercial bank on September 21, according to several people familiar with the events.
It sounds like it didn’t go too far beyond a call, although deals were getting done pretty fast at the time:
Goldman executives were not fully convinced of the merits of a deal with Citi but felt there was little downside in placing a call.
The possibility of serious merger talks between Citi and Goldman became a non-starter after this month’s decision by the US Treasury to inject $125bn of capital in the two companies and seven rivals. The move was designed to allay investors’ fears of further failures among large US financial groups.
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