Financial History Issue 132 (Winter 2020) | Page 37

Certificate for 100 shares of stock owned by Shearson Hammill & Co., 1971.
credit company. Commercial Credit’s par-
ent company was Control Data Corpora-
tion, “a computer maker that had diver-
sified into consumer lending.” Control
Data Corp. brought Weill in to run the
subsidiary and the firm went public soon
after. Using Commercial Credit as a base,
Weill began to buy other firms. In 1988,
he bought Primerica, the parent company
of Smith Barney, Harris Upham & Co.,
which was the product of the 1976 merger
between Smith Barney & Co. and Harris,
Upham & Co.
Primerica was originally called the
American Can Co. Founded in New Jersey
in 1901, American Can was a force in the
can making industry for more than half
a century. It began to diversify its opera-
tions in 1957 and changed from a packag-
ing company into a financial services firm
under CEO William Woodside, an Ohio
native who was the son of an engineer. By
the early 1980s, the firm underwrote insur-
ance, managed mutual funds, acted as a
mortgage bank and marketed consumer
products through direct mail. Much of
the change was credited to Gerald Tsai,
Jr., a Chinese American immigrant and
descendant of Chinese textile manufactur-
ers, who made his name in the 1960s as a
mutual fund entrepreneur.
In 1978, Tsai gained control of Associated
Madison companies, a life insurance firm.
In 1982, American Can bought the firm.
Woodside said “he bought that company
primarily to get the 56-year-old Mr. Tsai,
now an American Can vice chairman, on
board.” Under Tsai’s leadership, the firm
sold the part of the company that produced
cans to Triangle Industries, then led by Nel-
son Peltz, a venture capitalist, and changed
its name to Primerica in 1987. Tsai became
CEO and “the first Chinese-American to
lead a Dow Jones industrials company.”
After selling the firm’s can operations,
Tsai went on a “buying spree,” which
included Smith Barney Harris Upham.
Unfortunately for Tsai, he bought the
firm for $750 million right before the
Crash of 1987. According to The New
York Times, “Having overpaid, Primerica
needed a buyer.” In 1988, Weill’s Com-
mercial Credit Corp. agreed to buy Prim-
erica in a $1.5 billion deal. Tsai “remained
the largest shareholder but handed day-
to-day management to Mr. Weill.” Com-
mercial Credit then changed its name to
Primerica. The purchase of Primerica fur-
thered established Weill’s reputation “as
the investment world’s most prominent
empire builder.” The Times said, “They
call it Primerica Inc., but Weill Enterprises
would be more descriptive.”
Five years after Weill took over Prim-
erica, he jumped on the opportunity to
take back control of his old firm. In 1993,
right after Golub became chairman of
American Express, Weill called to ask if he
would sell Shearson Lehman. Soon after,
Primerica bought Shearson Lehman from
American Express “for $1 billion plus a
share of future profits.” American Express
kept Lehman Brothers and its expertise in
corporate finance and underwriting, “but
said it planned to sell Lehman as soon as
its financial condition was strengthened.”
Jamie Dimon, Weill’s other protégé,
became president of Primerica (Dimon had
left American Express when Weill left and
moved to Commercial Credit Corp. with
him). Primerica’s Smith Barney division
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