Tapping Rumsfeld's Defense Savvy
Shepherd, Bill, Global Finance
Salomon Smith Barney is drawing a bead on US and European defense mergers.
A time-honored way of expanding connections beyond vour own board members is to set up an advisory board. Salomon Smith Barney's new advisory board is a model of the genre-a glittery cast of 10 corporate and former government figures with lots of clout, who together hold board seats on 44 maior companies
One strategy behind the move is no doubt to help Salomon, the investment banking arm of Citigroup, pursue what's expected to be a wave of transatlantic M&As among European and US defense companies, a trend touched off last year when Britain's General Electric bought America's Tracor for $1.4 billion. DaimlerChrysler is now negotiating a 12% stake in America's Spacelab, and Lockheed Martin is showing interest in France's Aerospatiale Matra. Northrop Grumman is another US company that might be a target for European buyers.
The clue that Salomon may be after such business is the man that Citigroup co-CEOs John Reed and Sandy Weill chose to head their new board: Donald H. Rumsfeld. A former boss of both G.D. Searle and General Instrument, Rumsfeld now chairs Gilead Sciences, a small California developer of nucleotides, the building blocks of DNA and RNA. But he used to be US defense secretary in the Nixon and Ford administrations, and he advised on defense and diplomacy during the Reagan years. …