Though the proposed merger of Citicorp and Travelers Group would create the largest financial institution in the world, the new company would probably move quickly to get bigger still.

Travelers' announcement Monday that it will buy a 25% stake in Japan's Nikko Securities Co. shows how the proposed Citigroup plans to maintain its dominance in its chosen businesses via acquisitions. Analysts are predicting a flurry of deals for smaller financial services firms by both Travelers and Citicorp over the next 18 months.

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