Article: Legg Mason to Swap Units With Citigroup; Deal Would Make Baltimore Firm One Of Largest U.S. Money Managers

Legg Mason Inc. agreed to swap its 1,400 stockbrokers for Citigroup Inc.'s mutual fund business, a $3.7 billion deal that would complete Legg Mason's transformation into one of the largest U.S. money managers.

With the deal announced yesterday, New York-based Citigroup would largely exit the mutual fund business in favor of selling such funds for others. The Baltimore-based Legg Mason would do the opposite, concentrating strictly on managing mutual funds and other investment products and getting out of the stock brokerage business.

The unusual transaction highlights the growing pressure on the investment industry to break up the combined retail brokerage and investment fund businesses that ...

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