Salomon Bros. $10 billion merger with Smith Barney is poised to give the new entity a big presence in trading and research, but for retail sales, the merger may mean little more than perhaps better bond prices.
"I'm told that our fixed-income capabilities will be better, but there is very little of my business that is subject to change," says one top Smith Barney producer. He says the changes amount to a corporate shuffle with no direct impact on his retail client business. "[Travelers CEO] Sandy [Weill] is going and buying a bond firm, and with rates looking like they are lowering, he may have made a good bet. But, like I said, that has little to do with me."
Some brokers, however, may see some of their favorite analysts get the boot. Travelers Group, the parent of Smith Barney, says it will oust 20 senior Smith Barney analysts and another 18 from Salomon as part of the merger. The layoffs are part of a broader 1,500 employee cutback announced by Travelers.
Weill "is well-known for his cost cutting, but that may save us money and make us more profitable over time," says the Smith Barney producer, who declined to be identified.
Another producer, David Yvars, a Smith Barney rep in White Plains, N.Y., is also positive on the deal. "I can't see this one as being a negative," says Yvars. "It provides us with more product and better research, and no one is stepping on anyone's feet as far as retail goes." He says Smith Barney producers don't have to worry about new Salomon management. "They're not a retail shop," says Yvars.
Other brokers say the merger is different from past Wall Street mergers, such as Shearson and Lehman Bros., or Lehman and EF Hutton. "There, there was a clash of cultures. Here, we don't have that," says another Smith Barney broker and management executive who declined to be identified.
As for those analysts losing their positions in the transition: "In my mind, they are paid to predict the future. That's a tough job no matter whose job it is," says the Smith Barney executive. "I don't rely on them that much anyway."