Citigroup is considered the nation's leading credit card issuerwhile The Associates handles private-label credit cards forpowerhouse retailers and maintains a large consumer-based lendingoperation for home equity loans, personal loans and small-businessloans. The merger will be financed via a tax-free stock exchangeand is expected to close by year's end. The deal is pendingapproval from federal and state regulators and shareholders.

The fate of Associates' 8,000-member staff in North Texasremains uncertain. Citigroup has set aside about $600 million forlayoffs, asset write-downs connected to the deal and facilityclosings. This morning is opening with talks to employees about themerger, which has been kept under wraps for better than a monthwhile an agreement was being sealed.

The Associates, around since 1918, will lose its name in thetakeover. Citigroup plans to operate the newly crafted consumerfinance unit under the banner of CitiFinancial, which will havesome 2,000 satellite offices in the US and carry about $50 billionin consumer loans. The Associates, a global entity, is ranked fifthamong Japan's consumer lending entities - a positioning thatCitigroup officials say is enviable.

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