Shearson's Acquisition Journey and Milestones

Shearson's Acquisition Journey and Milestones was a significant part of the company's history.

Shearson Loeb Rhoades was formed in 1974 through the merger of Shearson Hammill & Co. and Loeb Rhoades & Co.

The company continued to grow and expand through strategic acquisitions, including the purchase of Hayden Stone in 1978.

Shearson Loeb Rhoades was acquired by American Express in 1981 for $1 billion.

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Shearson has a rich history that spans over a century. It was founded in 1902 as Shearson, Hammill & Co.

One of the earliest predecessors of Shearson was Hayden, Stone & Co., which was established in 1873. Hayden, Stone & Co. later merged with Shearson, Hammill & Co. in 1973 to form Shearson Hayden Stone.

Edward Shearson was a key figure in the company's early history. He founded Shearson, Hammill & Co. in 1902 and played a crucial role in shaping the company's future.

Here's a brief timeline of some of the major milestones in Shearson's history:

Hammill & Co. was a crucial part of Shearson Hammill & Co.'s early success, founded in 1902 by Caleb Wild Hammill.

The firm's origins are closely tied to Hammill's background, who moved to New York in 1890 after initially settling in Chicago. Hammill's experience in the city likely influenced his business decisions.

Shearson Hammill & Co.'s original headquarters was located in the Empire Building at 71 Broadway in New York City, with another main office in Chicago. By the end of World War I, the firm had six branch offices and seven correspondents.

The firm's expansion was a significant milestone, reflecting its growing influence in the financial industry.

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The Shearson name has undergone significant changes over the years. Edward Shearson founded the company in 1901 as Shearson Hammill & Co., an investment banking and brokerage firm.

Here's a brief overview of the major name changes:

The company's name changed frequently due to mergers and acquisitions.

Shearson's history dates back to 1902 when Edward Shearson and Caleb Wild Hammill founded Shearson, Hammill & Co.

The firm was originally a Wall Street brokerage and investment banking firm that built its business as a stock broker and broker of various commodities, particularly grain and cotton. It was a member of the New York Stock Exchange, the Chicago Stock Exchange, and the Chicago Mercantile Exchange.

Edward Shearson, the founder, served as comptroller of U.S. Steel and Federal Steel Company before starting the firm. He began his career as an auditor for the Wisconsin Central Railroad in 1898.

Shearson Hammill & Co. was headquartered in the Empire Building at 71 Broadway in New York City and had another main office in Chicago. By the end of World War I, the firm had six branch offices and seven correspondents.

The firm's commercials in the 1960s suggested "If You Want To Know What’s Going On On Wall Street, Ask Shearson Hammill". At that time, Shearson Hammill had 63 offices in the US and internationally supported by a well-regarded securities research department.

Here are some key figures involved in the early days of Shearson:

Shearson's acquisition history is a long and complex one, with several major mergers and acquisitions taking place over the years. The company's roots date back to 1902 with the establishment of Shearson, Hammill & Co.

In the 1970s, Shearson Loeb Rhoades was formed through a series of mergers, including the combination of Hayden Stone, Inc. and Loeb, Rhoades, Hornblower & Co. in 1979. Shearson Loeb Rhoades was the second-largest securities firm in the US at the time, with $250 million in capital.

Here are some key acquisitions and mergers that helped shape Shearson:

In 1981, American Express purchased Shearson Loeb Rhoades, forming Shearson/American Express, which was the largest securities brokerage firm in the industry at the time.

In 1979, Shearson merged with Loeb, Rhoades, Hornblower & Co. to form Shearson Loeb Rhoades, with Sanford Weill assuming the position of CEO of the combined firm.

The merger was an all-stock deal worth $83 million ($359.6 million today). This move helped introduce a stronger investment banking business to Shearson, making it the second largest brokerage firm in the U.S.

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By the time of the merger, Shearson Loeb Rhoades had $260 million of combined assets and approximately $550 million of revenue. The firm was among the largest investment banking houses at the time.

The merger with Loeb Rhoades marked a significant turning point for Shearson, setting the stage for future acquisitions and mergers.

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American Express embarked on an effort to become a financial services supercompany in the 1980s.

In mid-1981, American Express purchased Shearson Loeb Rhoades, the second largest securities firm in the United States, to form Shearson/American Express. This acquisition brought in $250 million in capital at the time.

The combined firm trailed only Merrill Lynch as the securities brokerage industry's largest firm. Shearson Loeb Rhoades was the culmination of several mergers in the 1970s, with Weill's Hayden Stone, Inc. merging with Shearson, Hammill & Co. in 1974 to form Shearson Hayden Stone.

Shearson Hayden Stone then merged with Loeb, Rhoades, Hornblower & Co. in 1979 to form Shearson Loeb Rhoades. Sanford I. Weill was given the position of president of American Express in 1983.

Weill was later named chairman and CEO of American Express's insurance subsidiary, Fireman's Fund Insurance Company, in 1984. However, Weill grew increasingly unhappy with his responsibilities within American Express.

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Shearson Lehman Hutton was formed in 1988 through a merger of Shearson Lehman Brothers and Shearson Loeb Rhoades. This marked the beginning of a significant consolidation in the financial industry.

Shearson Loeb Rhoades itself was created in 1979 through an $83 million all-stock merger between Shearson and Loeb, Rhoades, Hornblower & Co. This merger helped introduce a stronger investment banking business to Shearson.

In 1984, American Express acquired Lehman Brothers Kuhn Loeb, adding it to the Shearson family and creating Shearson Lehman/American Express. This acquisition further solidified Shearson's position in the financial industry.

Shearson's history is marked by several notable mergers and acquisitions, including the 1973 merger of Shearson Hayden Stone and the 1981 acquisition of Shearson Loeb Rhoades.

The following list highlights some of the key companies involved in Shearson's acquisition history:

American Express sold its retail brokerage and asset management business to Primerica in 1993. This business was merged with Primerica's Smith Barney to create Smith Barney Shearson.

The Shearson name was eventually dropped in 1994. This marked a significant change for the company.

American Express spun off its remaining investment banking and institutional businesses as Lehman Brothers in 1994.

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Shearson had its fair share of notable events throughout its history. The company was founded in 1853 by John Shearson.

Shearson's early success was largely due to its innovative approach to commission-based trading. This approach allowed the firm to expand rapidly.

In 1931, Shearson merged with other firms to form Shearson, Hammill & Co. This merger marked a significant turning point in the company's history.

Shearson's acquisition by American Express in 1981 was a major event in the company's history. This acquisition brought significant resources and expertise to the firm.

Shearson's decline in the 1990s was a notable event in the company's history. The firm faced increased competition and regulatory challenges.

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Strong leadership is crucial in driving successful outcomes in high-stakes negotiations. Decisiveness is key, and leaders who demonstrate this quality are more likely to make informed and timely decisions.

Leadership on both sides of the Shearson deal demonstrated exceptional decisiveness, likely bolstered by strong advisory teams. The right support empowers leaders to make informed and timely decisions that can significantly influence the speed and success of mergers and acquisitions.

Having a strong advisory team is essential, as seen with Hutton's two heavyweight advisors, Salomon Brothers and Blackstone.

Sanford I. Weill's firm, Cogan, Berlind, Weill & Levitt, was acquiring many of Wall Street's oldest and most venerable investment banking and brokerage firms in the 1960s and 1970s.

By 1973, Weill's firm was known as Hayden Stone, Inc. following CBWL's acquisition of Hayden, Stone & Co. Weill retained the Shearson brand after merging Shearson with Hayden Stone, Inc.

Shearson faced financial difficulties in the early 1970s, similar to many other Wall Street firms during the 1973-1974 stock market crash.

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Lehman Brothers was a merger of Lehman Brothers and Kuhn Loeb in 1977, led by Pete Peterson, a former United States Secretary of Commerce.

Peterson's leadership style was soon challenged by hostilities between investment bankers and traders, which led to a power struggle that ousted Peterson and left Lewis Glucksman as the sole CEO.

The power struggle resulted in a significant loss of talent, with upset bankers leaving the company, and Glucksman was eventually pressured into selling the firm.

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Shearson Lehman, the company that emerged after the sale, was aggressive in building its leveraged finance business, much like its rival Drexel Burnham Lambert.

Shearson Lehman's attempt to back F. Ross Johnson's management team in a management buyout of RJR Nabisco was ultimately unsuccessful, outbid by private equity firm Kohlberg Kravis Roberts, who were backed by Drexel.

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Shearson Lehman Hutton was formed in 1988 after a $1 billion merger between Shearson Lehman and E.F. Hutton & Co.

The Hutton brothers, Edward Francis Hutton and Franklyn Laws Hutton, founded E.F. Hutton & Co. in 1904, making it one of the largest brokerage firms in the U.S.

E.F. Hutton became known for its commercials in the 1970s and 1980s that used the phrase, "When E. F. Hutton talks, people listen".

Hutton was caught up in a check kiting scandal in 1985, where branches were writing checks against accounts at various regional banks and then funding those accounts with checks from yet other banks.

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This strategy, known as "chaining", gave Hutton the use of money in both accounts until the checks cleared, essentially giving itself a free loan.

In 1987, an internal Hutton probe revealed that brokers at an office in Providence, Rhode Island, laundered money for the Patriarca crime family.

The scandal was uncovered only a week before the 1987 stock market crash, and by the end of November 1987, Hutton had lost $76 million.

Joe Plumeri became the President & Managing Partner of Shearson Lehman Brothers in 1990, after the Hutton brand was abandoned and the business was renamed.

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Strong leadership is crucial in driving successful outcomes in high-stakes negotiations. This is evident in the case of Hutton, who was supported by two heavyweight advisors: Salomon Brothers and Blackstone.

Leaders who have the right support can make informed and timely decisions that significantly influence the speed and success of mergers and acquisitions. This is because expert advisory and support can enhance a leader's confidence in making pivotal decisions.

Having a strong advisory team can make a big difference in a leader's ability to make decisions. For example, Hutton's advisors likely played a key role in preparing the groundwork that gave him confidence in making decisions.

Shearson had a complex company structure with numerous subsidiaries.

Shearson Lehman Hutton Inc. was the main subsidiary, with several other notable ones including Shearson Lehman Brothers International and The Robinson-Humphrey Co., Inc.

The company had a significant presence in the mortgage industry through Shearson Lehman Mortgage Corp. and Shearson Lehman Hutton Mortgage Corporation.

Shearson also had a global asset management arm, with Shearson Lehman Global Asset Management Ltd. and Shearson Lehman Hutton Asia Inc. operating in various regions.

Shearson Lehman Hutton Special Financing Inc. and Shearson Lehman Hutton Puerto Rico Inc. indicate the company's involvement in specialized financing and operations in Puerto Rico.

The company's asset management capabilities were further enhanced by SLH Asset Management and Shearson Asset Management, Inc.