October 9, 2009 / 7:24 PM / 9 years ago

FACTBOX: A history of Citi's Phibro unit

(Reuters) - Citigroup Inc is selling its Phibro commodities trading business to Occidental Petroleum Corp.

* Based in Westport, Connecticut, Phibro is run by Andrew Hall, who made headlines after he was awarded a $100 million bonus last year.

* Phibro was founded in 1914, originally as Philipp Brothers. In the 1960s it became a part of Engelhard Minerals & Chemicals Corp, but it was spun off in 1981 to become Phibro Corp. (BASF AG bought Engelhard Corp in 2006).

* Phibro Corp acquired Salomon Brothers in 1981 and the company was known as Phibro-Salomon until 1986, when Salomon won control and the name became Salomon Inc.

* Phibro became a part of Citigroup through Travelers Group’s 1997 acquisition of Salomon Inc. Travelers and Citicorp combined in 1998.

* In the mid 1990s Phibro restructured and cut staff as part of a move out of refining to become almost exclusively a proprietary trading operation. The company had suffered big losses in physical products trading in Europe in the early 1990s.

* Citigroup first put Phibro up for sale in December 1998, when the unit’s revenues and profits were fluctuating wildly, but it never found a buyer.

* Billionaire investor Warren Buffett was recently seen as a contender for Phibro, according to the New York Times. He is familiar with the company from his time as a Salomon Brothers board member in the early 1990s. Talks between Buffett and Citigroup went nowhere and there was no firm discussion of price, the newspaper said in August.

* Belgian-born billionaire Marc Rich began his career at Philipp Brothers, where he made huge profits for the firm. Rich quit after becoming infuriated by pay and trading strictures, according to his biographer A. Craig Copetas, and he founded his own international commodity trading firm Marc Rich and Co Holding AG in 1974, eventually buying Philipp Brothers’ base metals business in 1990. Rich fled to Switzerland after being indicted in 1983 on 50 counts of wire fraud, racketeering, trading with Iran in violation of a trade embargo and evading more than $48 million in income taxes. U.S. President Bill Clinton pardoned him in the waning days of his administration in 2001 in a highly controversial move.

Reporting by Elinor Comlay, editing by Gerald E. McCormick

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