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Earlier this year, American Express chief executive Harvey Golub and Citicorp chairman John Reed sat down to discuss a possible sale of Amex to Citicorp. The two men and their lieutenants and advisers talked over joining the US's largest bank (by market capitalization) with the world's most famous credit card brand. In doing so they briefly contemplated what would have been the largest-ever M&A transaction. A purchase price for Amex of between $90 and $100 a share - and it would probably be closer to $100 - would imply a $40 billion deal. Amex looked attractive. Citicorp is keen to develop asset management, recently hiring Peter Carman from asset manager Putnam Investment to build business in that area. Amex is strong in asset management. But to progress from talk to action, the two sides would have had to find a way around the obstacle of Citicorp's existing relationship with Visa and MasterCard, which prohibit banks from issuing rival cards.
Actually doing the deal raised even more awkward questions, involving not so much business fit and strategy as politics and personality. Golub and Reed are both 57, and both enjoy formidable status and reputation and are well used to power and autonomy.