The Associates is the country's largest source of financing and leasing for heavy duty trucks and trailers and a major source of financing for medium duty trucks. It's also the nation's leading independent lender for heavy construction equipment and the third largest provider of motor vehicle fleet management services. Citigroup Equipment Finance Operations serve a range of industries, offering lease and finance plans for ships, rail equipment, technology, and trucks. It also offers financing for heavy equipment dealers.
But Citigroup's $31 million purchase also gives it a leading provider of home equity loans, credit card services, and insurance operations. Associates, founded in 1918, manages assets of more than $100 billion and maintains 2,750 offices in 14 countries.
Citigroup, the holding company for Citicorp, is a global financial services company with assets of more than $791 billion and operations in more than 100 countries. Product lines include consumer banking and credit, insurance, securities brokerage and asset management. Brand names under the Citigroup umbrella include Citibank, Travelers, Salomon Smith Barney, CitiFinancal and Primerica.
Most of the overlap in merging the two companies will come in the consumer finance units. At a press conference, executives of both companies said duplicate services will be eliminated for a savings of some $600 million in the first two years, but they declined to say specifically if jobs would be cut.
The buyout, approved by the boards of directors of both companies, offers Associates shareholders .7334 common shares of Citigroup for each share of Associates common stock. Associates shareholders would own about 10% of Citigroup. The deal is expected to close by the end of the year, pending shareholder and regulatory approval.