Citigroup eyeing Morgan Stanley venture

Jan. 10, 2009 at 2:37 PM

SAN FRANCISCO, Jan. 10 (UPI) -- Citigroup Inc. reportedly is considering conducting a joint venture between its struggling Smith Barney brokerage unit and Morgan Stanley.

While some reports have Citigroup placing Smith Barney up for sale, MarketWatch reported Friday that Citigroup is considering a joint venture global financial giant as an alternative.

Representatives for both finance companies had no comments about the joint venture reports.

MarketWatch said the potential deal would likely include a large payment from Morgan Stanley to Citigroup, which has struggled significantly during the economic crisis and is receiving government assistance.

Such a potential payment from Morgan Stanley would give the U.S. financial group a majority stake in the companies' venture.

MarketWatch said, according to CNBC, Morgan Stanley would also have the right to purchase additional stake in the venture and gain therefore gain additional control of the business.

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