Travelers Group does not have much to add to Citicorp's industry- leading credit card totals-unless and until American Express enters the picture.

The proposed Citi-Travelers merger has raised the intriguing possibility that American Express, which has issued about as many cards as Citibank, could become an acquisition target of the new Citigroup.

It may be pure speculation at this point, but it has factual and logical roots.

Citicorp chairman and chief executive officer John S. Reed disclosed last year that he had tried and failed to negotiate a merger with his American Express counterpart, Harvey Golub.

Sanford I. Weill, Travelers' chairman and CEO, who was unable to put all his ideas to work during a 21-month tenure as American Express president in the mid-1980s, may relish the opportunity to try again.

Citigroup's pro forma market capitalization of $135 billion would presumably allow it to afford just about anything it wanted to, including the $40 billion price Mr. Reed was reportedly talking about in 1997. (Amex's current valuation: $48 billion.)

"This new entity could buy most anything, but imagining another large company going into its fold would be remarkable," said PaineWebber analyst Gary Gordon.

But what was mind-boggling before this week may now seem within reason.

The last talks between Citicorp and American Express were said to have run aground when Mr. Reed and Mr. Golub could not agree on how to share power. Mr. Reed reached an accommodation with Mr. Weill on that issue: They said they will begin as co-chairmen of Citigroup.

"Golub may see that Reed is willing to share or that it makes sense to be part of such a team instead of going it alone," said Donald M. Berman, president of Cardholder Management Services, a consulting firm in Plainview, N.Y.

"Harvey Golub is a great strategic thinker," said BT Alex. Brown analyst Mark C. Alpert. "American Express will be faster to adapt to any change in the landscape than most of the other financial institutions."

American Express declined to comment Wednesday on the Citigroup merger or how it might be affected by it.

Personalities and Mr. Weill's long memory would surely come into play.

Mr. Weill, who came into American Express when it acquired the Shearson Loeb Rhoades brokerage in 1981, resigned as president of the parent company in 1985. He was believed to have coveted the chairmanship, held then by James D. Robinson 3d.

Mr. Weill overlapped at the company with Mr. Golub for about a year. Mr. Golub came in on a similar path: American Express in 1984 bought the organization he headed, IDS Financial Services. Both men are Brooklyn, N.Y., natives and are often described as bringing a "street fighter" mentality to business.

Mr. Alpert said Mr. Golub may come to the conclusion that Mr. Reed and Mr. Weill are at the industry's cutting edge and may be worth talking to. The reasoning would be, Mr. Alpert said, that "it is probably better to invest with the CEOs that are best at understanding the competitive environment."

Somehow, Citicorp or Citigroup would have to find its way around Visa and MasterCard membership rules that bar it from issuing American Express cards. But the banking company did find a way to offer the Diners Club and Carte Blanche brands that compete with American Express. PaineWebber's Mr. Gordon said Citi could buy American Express with the intention of forming an independent merchant network.

American Express' card accounts would have a far greater impact than the $1.4 billion of receivables that Travelers would add to Citibank's $60 billion. The latter number includes the recently acquired AT&T Universal Card portfolio, and it could rise further through cross-selling.

"You will see the new Visa Signature card being marketed to Travelers customers," said David Robertson, president of the newsletter The Nilson Report. Signature is a recently announced, upscale product aimed at the same customers American Express seeks with its platinum card.

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