History
Smith Barney & Co. was formed in 1938 through the merger of Charles D. Barney & Co. and Edward B. Smith & Co.. Charles D. Barney & Co., a New York and Philadelphia based firm, was founded by Charles D. Barney in 1873 following the failure of its predecessor Jay Cooke & Company. Edward B. Smith & Co., founded in 1892 became a significant player in securities underwriting in 1934 when the firm absorbed the professionals from the securities business of Guaranty Trust Company, following the passage of the Glass Steagall Act.
In 1975, Smith Barney merged with Harris, Upham & Co. to form Smith Barney, Harris Upham & Co., which, in 1977, was placed under SBHU Holdings, a holding company. In 1982, SBHU Holdings was renamed Smith Barney Inc. During the 1980s, the company was known for its television commercials featuring actor John Houseman, with the catchphrase, "They make money the old-fashioned way. They earn it."
In the late 1980s, the retail brokerage firm Smith Barney was owned by Sanford I. Weill's Primerica Corporation. Commercial Credit purchased Primerica in 1988, for $1.5 billion ($2,947,664,603 today). In 1992, they paid $722 million ($1,195,742,945 today) to buy a 27% share of Travelers Insurance and in 1993 acquired Shearson (which included the legacy business of E.F. Hutton from American Express. By the end of 1993, the merged company was known as Travelers Group Inc. although the brokerage business continued to operate under the Smith Barney brand.
In 1993, Weill bought stockbroker Shearson back from American Express for $1 billion ($1,608,845,888 today), and merged it into Smith Barney. Weill offered Joe Plumeri the presidency of Smith Barney, and he became the President of the merged company that year. He only lasted a year, as he experienced conflicts with existing Smith Barney managers.
In September 1997, Travelers acquired Salomon Inc. (parent company of Salomon Brothers Inc.), for over $9 billion ($13,029,850,746 today) in stock, and merged it with its own investment arm to create Salomon Smith Barney. In April 1998 Travelers Group announced an agreement to undertake a $76 billion ($108,367,496,938 today) merger between Travelers and Citicorp, creating Citigroup, which at the time of the merger was the largest single financial services company in the world.
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