Citigroup: Just The Start?

Saudi Arabia's Prince Alwaleed bin Talal bin Abdulaziz Alsaud, who owns a staggering 40 million shares of Citicorp stock, admits to "feeling pretty good" about the world's largest-ever merger, the $70 billion deal that will marry Citi to Travelers Group Inc. and create a megabank with global reach and nearly $700 billion in assets. He should be happy: The Apr. 6 Citigroup deal added some $1.5 billion to the Prince's net worth. Says the Prince: "This is a very positive thing."

It was also inevitable. In the U.S. and around the world, banks, securities houses, and insurers are in the midst of a furious round of mergers and takeovers--all aimed at getting control of more and more of consumers' finances. Even before the pact, Citi execs were talking of reaching a billion customers worldwide by 2010. In creating Citigroup, co-CEOs-to-be John S. Reed and Sanford I. Weill are only accelerating the transformation of the financial-services industry that is already under way. Says financial historian Ron Chernow: "Mergers that looked like earthquakes last year now look like tremors by comparison."