The Travelers Company is known as the largest
insurance company situated in United States of America. The company has immense
market value and offers great deals in various sectors such as business,
finance, investment etc. it has top notch ranking among US personal insurance
and commercial property casualty. The company has experienced many mergers and
acquisition in a fairly short span of time. It has stood out to become the
first in various investment sectors such as the automobile policy, space travel
policy, commercial airline policy etc.
The Traveler’s Company biggest success is affiliated
to its merger with the Citicorp in order to give birth to Citigroup. This is
considered as one of the most wholesome move taken by the company. This step
allowed them to collaborate with bigger banks to acquire them. Although extreme
resonance was experienced in the company when the banking and insurance sector
started to function together. Also the Citigroup’s stock price started to
plunge gradually with the process of many Class A shares.
By the end of the first year, IPO announced that
Citigroup had about 500 million shares of Class B which received seven votes
each. Moreover, the Class A shares were about 269 million entitled to one vote
each. Hence, this totaled 94% of total voting power carried out by TPC voting
security and 77% of the equity interest. It is said that TPC and IPO together
offered 4.5% of adjustable notes
Soon The Travelers Company experienced a major turn
over from Citicorp in order to become the Citigroup’s subsidiary. The company
realized that the plans to sell the company will result in extremely high tax
implications thus they decided to quit the idea of selling the company. So the
company device a new strategy to offer a 20 percent stake of the organization
with a basic public offering of $1 billion capital estimated from the IPO
whereas the other stakes would be acquired from stakeholders. Among its owners,
the corporation gave a chunk of its possession to TPC along with the stocks
published by the IPO.
Hence in a nutshell, The Travelers Company
experienced a major shift in a very short span of time that halted their growth
and resulted in loss of shares, market value and assets. Hence the acquisition
did not prove fruitful for the organization any how causing immense damage to
the structure of the organization.
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