is in the final stages of talks to sell its asset management business. The New York Times
cites two executives who have been briefed on the deal that the bank will sell the unit to Legg Mason
. Word of the talks comes as Citigroup CEO Charles Prince has been pushing the bank to refocus on its core business.
Both Citigroup and Legg Mason declined to comment to the times.
According to the paper, Citigroup will sell the asset management unit and focus on its distribution businesses, including consumer banking and retail brokerage. As part of a deal with Legg Mason, Citigroup would trade its asset management business for Legg Mason's brokerage force along with cash and stock worth as much as 19 percent of the company.
One possible sticking point on closing a deal is the terms under which Citigroup will be allowed to distribute Legg Mason's funds. A second is where in the pecking order Citigroup's fund managers will fall.
Much of Citigroup's business was acquired when the bank purchased Salomon Smith Barney under the leadership of then-CEO Sandy Weill.
Citigroup's asset management division claims some $460 billion in assets. However, that unit accounts for just 1 percent of Citigroup's profits, according to the Times.
For Legg Mason the deal would more than double its assets under management from its current $373 billion to more than $830 billion, making it one of the nationís largest asset managers. On the mutual fund front, Citigroup manages Legg's $140 billion in assets compared to $78 billion for Legg Mason.
It would also shed 1,542 brokers by sending them to Citigroup, which currently has a sales force of 12,182. The combined force of more than 13,600 would push it close to brokerage industry leader Merrill Lynch, which has more than 14,000 reps.
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