NEW YORK (Reuters) – Citigroup Inc. (C.N) was getting closer to a deal on Sunday to join its Smith Barney retail brokerage business into a joint venture with Morgan Stanley (MS.N), in a move that could see it get about $2.5 - $3 billion cash, a source familiar with the situation said.
Citi would also gain $5 billion-$6 billion in tangible common equity as a result of revaluing the unit as part of the bigger venture rather than as a stand-alone business, the source said.
The new business would have a combined estimated value of $16 billion to $20 billion, the source said.
A deal could be announced this week but is unlikely to come as soon as Monday, that source said. A second source familiar with the situation said an announcement was expected this week.